UK inflation slowed to 2.6% in March

The UK inflation rate fell to 2.6% on an annual basis in March, below analyst expectations of 2.7%. At the same time, prices grew 2.8% in February and 3% in January. 

The Office for National Statistics says the main downward drivers for the inflation rate were motor fuels, as well as culture and recreation. Meanwhile, the increase in clothing prices had the opposite effect, partially offsetting the overall decline in the rate. 

CNBC notes that the pound gained 0.25% following the data release, reaching $1.3265 against the US dollar. 

The new data will be considered by the Bank of England at the upcoming meeting on May 8, where the regulator may adjust its monetary policy and possibly lower interest rates. The central bank also warned earlier of a possible temporary rise in inflation to 3.7% in the third quarter, fueled by higher energy costs.