In March, the cost of living in the UK went up by 3.2%, which is the slowest increase in two and a half years. This happened because food prices went down, according to new data from the Office for National Statistics.
Experts were expecting the increase to be even smaller, at 3.1%, so it wasn’t as low as predicted. However, it’s still higher than the Bank of England’s target of 2%.
Back in 2022, inflation went up to over 11% because of Russia’s invasion of Ukraine, which caused energy prices to spike.
For the first time in two years, the UK’s inflation rate is lower than the US. In March, the US inflation rate was 3.5%.
In April, inflation is expected to drop even further, possibly below 2%, because energy bills will be much lower. This might make the Bank of England think about lowering interest rates, which are currently at 5.25%.
However, some experts think inflation might start going up again in the second half of the year.
The Bank of England, like other central banks, raised interest rates aggressively in 2021 to tackle inflation caused by supply chain problems during the pandemic and the Ukraine crisis.
Lower inflation and interest rates could make people feel better before the next general election, which must happen by January 2025. But right now, polls show the Labour Party is ahead of the Conservatives, who have been in power since 2010.
