The last time consumer price inflation was below 4% was in early 2011, so the 3.8% outcome for March was a welcome sight. The market had expected inflation to rise to 4.1%; instead it declined, thanks to lower fuel and food price inflation as well as slower inflation in items such as education, particularly higher education. It’s always a good sign when inflation figures are surprising on the downside, because it tends to indicate that price pressures in the economy are moderating in ways the economists haven’t even factored in yet. And the fact that core inflation has been coming in below expectations and for the past three months has been hovering at 4.1%, below the 4.5% midpoint of the inflation target range, is a good sign too. So unusually low an inflation number is bound to get people hoping there will be more interest rate cuts, after the monetary policy committee opted in March, after some heated debate, to cut the rate by 25 basis points. They need, of course, to remember t...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00. Got a subscription voucher? Redeem it now