• Consumer Prices Index rose by 0.5% in the year to March 2016, compared with a 0.3% rise in the year to February
  • Rises in air fares and clothing prices were the main contributors to the March increase, partially offset by a fall in food prices

Commenting on the inflation figures for March 2016, published today by the ONS, David Kern, BCC Chief Economist, said:

“We have seen a slight upward trend in inflation since October 2015, and although the rise in March was bigger than expected, inflation is still well below the Bank of England’s 2% target.

“However, with services inflation now approaching 3%, and in view of the sharp fall in sterling in recent months, it will be understandable if the MPC becomes more cautious, and its job may become more complicated if the upward pressures on prices continue.

“Despite this, with the 2% inflation target not likely to be met until the end of 2017, and given the underlying problems facing the global and UK economy, the current inflationary pressures still do not justify any change in the MPC’s policy stance on interest rates.”