Britain's economy slowed more sharply than first thought in early 2017 as consumers felt the hit from the rise in inflation that followed the Brexit vote and exporters struggled to benefit from the weak pound. Thursday's downbeat official data - which contrasts with signs of acceleration in many other economies - comes two weeks before Britons vote in a national election.
UK's inflation rate rose last month to its highest since September 2013, official figures show. Inflation now stands at 2.7% - up from 2.3% in March - and above the Bank of England's 2% target. The main reason was higher air fares, which rose because of the later date of Easter this year compared with 2016.
Inflation in the United Kingdom held steady last month, as rising prices for food and clothing were offset by lower air fares. The UK Office for National Statistics, ONS, said inflation as measured by the Consumer Prices Index remained at 2.3%.
The Bank of England may have to cut rates to combat low inflation, rather than raise them as its next move, its chief economist Andy Haldane has said. UK inflation may not pick up in the second half of the year, and there are risks of fallout from emerging economies, he said in a speech.
Bank of England governor Mark Carney said it would be “extremely foolish” for the Bank of England to cut interest rates to try to combat low inflation. He reiterated comments made in February that the drop in prices was temporary and largely caused by the sharp fall in oil prices.
The rate of UK Consumer Prices Index inflation fell to 0.3% in January, its lowest level since records began. Cheaper petrol and lower food prices, helped by a supermarket price war, cut the rate from 0.5% in December, Office for National Statistics figures show.
The UK inflation rate as measured by the Consumer Prices Index (CPI) fell to 1.6% in March from 1.7% in February, according to the Office for National Statistics (ONS). It is the third consecutive month inflation has been below the Bank of England's 2% target rate, and the lowest rate since October 2009.