UK inflation unexpectedly remained below target for the third month in a row in March, as higher fuel prices were offset by the falling prices of food and computer games.
Prices rose by 1.9% last month, the Office for National Statistics (ONS) has revealed, while core inflation held at 1.8%.
The rising price of oil meant vehicle fuel prices jumped 1%, compared to a 1.3% fall a year earlier, but food costs fell 0.1% and prices in the recreation and culture sector rose more slowly than for the same month in 2018, driven by games, toys, hobbies, as well as CDs, videos and music downloads.
Smith & Williamson global inflation-linked bond fund manager Tom Wells, said: "Although [the Retails Prices Index] was a little weaker than expected, we expect UK inflation to remain resilient over the coming months.
"One reason is that rising labour costs should start to feed through to inflation. Another is that the cap on utility prices is being increased and this will affect April's inflation print. Oil prices have also rallied over the last three months but clearly this is a volatile component of inflation."
Meanwhile, Brexit fears continue to take their toll on the property sector, as annual house price growth slowed to its lowest level since September 2012 in February at 0.6%; London saw the biggest decline in house values of 3.8%.
The lower-than-expected figure is a boost for consumers, as it means prices are rising slower than wages. At the same time, policy makers can relax and keep interest rates on hold while the uncertainty around Brexit continues.
Fidelity International personal investing director Tom Stevenson said: "The Bank of England will view today's inflation data as the least problematic of the week's three economic announcements. Prices are rising pretty much in line with the Old Lady's 2% target, giving the central bank cover to continue sitting on its hands. As such the Consumer Prices Index (CPI) data sits between yesterday's employment data (which pointed towards higher interest rates in due course) and tomorrow's retail sales numbers (which probably won't).
"The bank is stuck on the horns of a Brexit dilemma. The strong jobs market illustrates the danger of leaving interest rates at today's historically low level but the rest of the economy is clearly struggling with the ongoing uncertainty which only deepened with the latest Article 50 extension. Until there is more political clarity, the Bank will remain unable to begin its desired normalisation of monetary policy.
"With interest rates unlikely to rise much for the foreseeable future, savers and investors will need to continue seeking decent returns in the stockmarket. Fortunately, the UK market offers an attractive alternative, with historically low valuations and an income yield well in excess of that on offer traditionally safer investments like bonds and cash."
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