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UK inflation holds steady in March

Inflation in Britain was unchanged last month, but was still up 2.3 percent compared to a year ago. Retail sales dipped in March

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UK inflation holds steady in March

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Inflation in Britain was unchanged in March – but it was still up 2.3 percent compared to a year ago.

Food prices rose by an annual 1.2 percent last month, their biggest increase in three years.

Inflation would have been stronger but for the Easter holidays falling in April this year which reduced airfares in March. In addition the cost of crude oil dipped last month.

With wage increases lagging behind inflation the higher prices do seem to be having an effect on consumer spending.

Retail sales fell 1.0 percent in March from a year earlier on a like-for-like basis.

But the British Retail Consortium, which compiles the statistics, said the timing of Easter could have distorted those numbers.

Inflation set in increase in April

With Easter falling in April this year, inflation is likely to come under renewed pressure from airfares.

In March last year – which included the Easter holiday – airfares jumped more than 20 percent.

Also in April, increases in taxes on air passengers and car owners are kicking in and many utility companies are raising their prices too.

Housing costs, which include utility bills, already rose at their fastest pace since November 2014 in March, the ONS figures showed.

Furthermore, economists say the impact of the fall in the value of the pound on inflation will probably be felt more strongly in the coming months.

The pound weakened following last year’s referendum decision for Britain to leave the European Union.