By Marcus Leach
Higher food prices have seen inflation in the UK rise unexpectedly on the Consumer Prices Index (CPI) in March.
Data from the Office for National Statistics (ONS) showed that CPI inflation rose from 3.4% in February to 3.5% in March.
Retail Prices Index (RPI) inflation fell slightly to 3.6% from 3.7%.
According to the ONS food and soft drink prices were up by 4.6% in comparison to March 2011, as well as clothing, footwear, DVDs and computer games contributing to the rise.
“The fall in inflation has screeched to a halt with the rise in headline consumer price inflation to 3.5% and core inflation to 2.5%," Graeme Leach, Chief Economist at the Institute of Directors, said.
"This probably puts the brake on any further expansion in quantitative easing in May, but the inflation outlook should still improve in the second half of the year. Last year’s energy price rises will fall out of the year on year comparison and, crucially, broad money supply growth remains anaemic.
"The Bank of England’s preferred measure of broad money is rising by just 2.5% and strongly suggests underlying inflationary pressures will remain weak. Today’s figures also showed that retail price inflation inched lower to 3.6%, so it was not all bad news.”
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