UK inflation holds steady in March in line with expectations, further rises expected

U.K. inflation stood held steady at 2.3 percent in annual terms in the month of March, data from the Office for National Statistics (ONS) showed on Tuesday. Data was in line with economists' forecasts in a Reuters poll. The month-on-month figure fell from 0.7 percent to 0.4 percent.

Details of the report showed rising prices for food, alcohol and tobacco, clothing and footwear, miscellaneous goods and services were offset by lower air fares. The ONS data showed food prices rose by an annual 1.2 percent in March, their biggest increase in three years.

U.K. inflation is now above the Bank of England's (BoE) target of 2 percent for the second month in a row. Inflation has accelerated in recent months, supported by a weakening of the pound and by the rise in oil prices which has fuelled inflation in other countries too.

Meanwhile, the annual rate of producer price inflation has dropped slightly in March, the Office for National Statistics also said on Tuesday. Output prices increased 3.6 percent on the year to March. This was slightly below the 3.7 percent seen in February. Prices of imported materials and fuels rose 17.1 percent on the year.