Inflation tumbles to 3.2% - the lowest level since 2021

Jeremy Hunt hailed brighter signs on the economy today as inflation dropped to the lowest level in two and a half years.

The headline CPI rate fell to 3.2 per cent in March, down from 3.4 per cent the previous month and driven largely by easing food prices.

It was last lower in September 2021 – although analysts had pencilled in a bigger dip to 3.1 per cent.

The Chancellor insisted the official figures showed the ‘plan is working’ and people will ‘start to feel the difference’.

The numbers were revealed after Andrew Bailey hinted that the Bank of England could start cutting interest rates before the US Federal Reserve.

The headline CPI rate fell to 3.2 per cent in March, down from 3.4 per cent the previous month and driven largely by easing food prices

Speaking at the International Monetary Fund (IMF) in Washington, the governor pointed to ‘strong evidence’ that the process of reducing inflation was now ‘working its way through’.

He said it was possible for the path of rates on either side of the Atlantic to diverge, adding: ‘The dynamics for inflation are rather different now between Europe and the US.’

The comments came as the governor’s Fed counterpart Jerome Powell warned that the US’s battle to tame price rises was ‘likely to take longer than expected’.

ONS chief economist Grant Fitzner said: ‘Inflation eased slightly in March to its lowest annual rate for two-and-a-half years.

‘Once again, food prices were the main reason for the fall, with prices rising by less than we saw a year ago.

‘Similarly to last month, we saw a partial offset from rising fuel prices.’

Mr Hunt said: ‘The plan is working: inflation is falling faster than expected, down from over 11 per cent to 3.2 per cent, the lowest level in nearly two and a half years, helping people’s money go further.

This welcome news comes on top of our cuts to national insurance, which save the average worker £900 a year, so people should start to feel the difference as well as see it in their pay cheques.’

Chancellor Jeremy Hunt insisted the official figures showed the ‘plan is working’ and people will ‘start to feel the difference’

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