LONDON • UK inflation unexpectedly stayed below target last month as higher fuel prices were offset by the cost of food and computer games.
Annual consumer-price growth remained at 1.9%, its third month below the Bank of England’s 2% goal, the Office for National Statistics (ONS) said yesterday. Core inflation held at 1.8%.
The lack of headline inflationary pressure gives policymakers breathing space to keep interest rates on hold until the Brexit crisis is resolved.
Rising oil prices saw the cost of filling up a vehicle climb 1% last month, compared to a 1.3% decline a year earlier.
But food costs fell 0.1% and the recreation and culture sector saw prices rise more slowly than they did in March 2018.
This was driven by games, toys and hobbies as well as the cost of compact discs, videos and music downloads, the ONS said.
Inflation in the services sector, seen as proxy for domestically generated inflation, held at 2.5% for a third month. Goods inflation remained at 1.3%.
Pipeline cost pressures were also subdued. Producer input prices fell 0.2% from February and were up just 3.7% from a year earlier. Output prices rose 0.3% on the month for an annual gain of 2.4%.
Brexit fears and affordability constraints continued to take a toll on the property market, with annual house price growth slowing to 0.6% in February, the least since September 2012.
The worst-performing region was London, where property values declined 3.8%, the biggest annual drop since August 2009. — Bloomberg