Bread price drop contributes to decrease in inflation

13 April, 2011

A record 2.6% drop in the price of bread and cereals contributed to the overall decrease in the price of food and non-alcoholic drinks, seen in the latest figures from the Office for National Statistics.

CPI (Consumer Price Index) annual inflation fell to 4% in March, down from 4.4% in February. A fall in the overall price of food and non-alcoholic beverages of 1.4% contrasted with a 0.3% rise seen between February and March 2010.

It was also a record drop for a February to March period, said the ONS. The price of bread and cereals fell by 2.6% this year, compared with a 0.2% drop a year ago.

Fruit prices fell by 4.6% this year, compared with a 0.7% rise a year ago.

The largest upward pressures to the change in CPI inflation came from housing and household services, with domestic heating costs – both gas and electricity – up on the static level seen a year ago. The price of second-hand vehicles has also increased.

In the year to March 2011, RPI (Retail Price Index) annual inflation stood at 5.3%, down from 5.5% in February. The main factors affecting the CPI also affected the RPI, said the ONS.

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