UK consumer price inflation eased in March, driven by falling fuel and recreation costs, data from the Office for National Statistics showed on Wednesday.

The consumer price index rose 2.6% in the 12 months to March, slowing from 2.8% in February and below the 2.7% FXStreet-cited market consensus expectation.

On a monthly basis, prices increased 0.3% in March from February, slowing from a 0.4% rise in February from January.

The broader measure of inflation, the consumer price index including owner occupiers’ housing costs, also known as CPIH also slowed, to 3.4% in March from 3.7% in February.

The sharpest downward contributions to annual inflation came from the recreation and culture, housing and household services, and transport categories, according to the ONS. Motor fuel prices fell 5.3% in the year to March, with petrol and diesel both down 1.6 pence per litre on the month.

Recreation and culture inflation cooled to 2.4%, its lowest annual rate since October 2021, the ONS said, while the inflation rate for restaurants and hotels eased to 3.0%, the weakest since July 2021. Food and non-alcoholic beverages inflation slowed slightly to 3.0% from 3.3% in February.

Core CPI, which strips out energy, food, alcohol, and tobacco, edged down to 3.4% from 3.5% in February. Core CPIH also slowed to 4.2% from 4.4%.

Owner occupiers’ housing costs – a component of CPIH – rose 7.2% in the year to March, easing from 7.5% in February. This marked the second consecutive monthly slowdown following 13 months of increases.

Despite the continued cooling, services inflation remained stood at 5.4%, down from 5.7% in February.

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