UK inflation falls as price of petrol drops

Faarea Masud

BBC Business reporter

Getty Images A man pays for his petrol using his bank card at the petrol pump.

Falling petrol prices drove UK inflation down by more than expected in the year to March.

Inflation was 2.6%, down from a rate of 2.8% in February, according to official data.

But the fall may only be temporary as analysts say it’s expected to spike from April as rising bills and higher business costs take hold.

“The only significant offset came from the price of clothes which rose strongly this month,” said Grant Fitzner, chief economist at the Office for National Statistics (ONS).

The inflation decrease was also driven by a drop in recreation and culture prices, with toys, games, and hobbies falling particularly sharply.

Wages continue to outpace inflation with salary raises for public sector workers growing more than those in the private sector.

The average rise in wages was 5.9%, data released by the ONS on Tuesday showed.

Line chart showing the UK Consumer Price Index annual inflation rate, from January 2016 to March 2025. In the year to January 2016, inflation was 0.3%. It then rose to around 3% in late-2017 before falling back closer to 0% in late-2020. From there, it began to rise sharply, hitting a high of 11.1% in October 2022, and then fell to a low of 1.7% in September 2024. In the year to March 2025, it was to 2.6%, down slightly from 2.8% the previous month.

The drop in inflation will be welcome news to the government, said Lindsay James, investment strategist at Quilter.

“With the jobs market weakening somewhat, and very real and present tariff threats still in play, any downward pressure on inflation will be hailed,” she said –

She added the forecast for inflation “remains very uncertain” because of a “volatile” global economy, and rising National Insurance which she said will raise prices from April onwards.