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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