The UK's annual inflation rate as indicated by the Consumer Prices Index (CPI) has seen a slight slowdown to 2.6% for the 12 months leading up to March 2025 from the 2.8% reported in February.
The data has been released by the Office for National Statistics (ONS), which also noted a month-on-month CPI increase of 0.3% in March 2025, in contrast to a rise of 0.6% in the same month of the previous year.
Excluding volatile components such as energy, food, alcohol and tobacco, the core CPI increased 3.4% over the 12 months to March 2025 - a small drop from the 3.5% increase up to February.
The annual rate for CPI goods decreased from 0.8% to 0.6%, and the annual rate for CPI services also saw a reduction from 5.0% to 4.7%.
Inflationary pressures showed signs of moderation, yet this trend was somewhat counterbalanced by rising costs in the apparel and shoe sectors.
During the year leading up to March 2025, there was a 1.1% increase in prices within this category, marking a shift from the previous year's decline of 0.6% during the same period ending in February.
Examining month-on-month changes, there was a notable 2.3% price increase in March 2025, in contrast to the modest 0.6% increase recorded during the same month of the previous year.
Food and non-alcoholic beverages also recorded a drop in its annual inflation rate to 3% as of March 2025, down from an increase of 3.3% in March the previous year.
In response to the ONS data, British Retail Consortium insights director Kris Hamer stated: “The slight easing in inflation in March will prove to be largely insignificant once the figures for April are released next month. Not only will many feel the pinch of rising household bills, but the impact of higher employer National Insurance and NLW could begin to filter through into consumer prices.
“To protect households, it is essential the government limits the burden on the industry in other areas, ensuring no shop pays more as a result of the upcoming business rates reform.”
Recent British Retail Consortium-KPMG survey showed that retail sales in the UK grew 1.1% in March 2025 compared to the same month of 2024.
