Breaking finance and business news, tax information, jobs and more for finance directors and senior finance professionals.

The consumer prices index. It is the measure adopted by the Government for its UK inflation target. The Bank of England's Monetary Policy Committee is required to achieve a target of 2 per cent.

The largest downward contribution to change in the CPI annual rate came from furniture, household equipment and maintenance where the price of furniture and furnishings rose by less than a year ago.

The main effects came from bedroom and kitchen furniture where a mix of recoveries and sales were observed this year compared with more general price increases a year ago.

A further large downward contribution came from recreation and culture, principally from games, toys and hobbies where the prices of computer games and pre-school activity toys in particular fell this year but rose a year ago.

The largest upward contribution to change in the CPI annual rate came from transport costs.

This was principally due to passenger air travel on European and, to a lesser extent, long-haul routes with fares rising this year compared with falls a year ago.

There was also a large upward contribution from housing and household services due to changes in the price of heating oil and gas.

The price of heating oil rose by more than a year ago while gas bills were unchanged this year but fell a year ago.

RPI inflation fell to 3.8 per cent in March, down from 4.1 per cent in February. The main factors affecting the CPI also affected the RPI. Additionally, there was a large downward contribution from housing.

The effect came mainly from mortgage interest payments as lenders passed on February’s quarter point decrease in the Bank rate and, to a lesser extent, from house depreciation which fell this year but rose a year ago.

Both mortgage interest payments and depreciation are excluded from the CPI.

RPIX inflation – the all items RPI excluding mortgage interest payments – was 3.5 per cent in March, down from 3.7 per cent in February.

As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate in February, at 2.5 per cent, was below the provisional figure for the European Union as a whole of 3.4 per cent.

Related articles

• Profit warnings hit 7-year high
• Factory gate inflation rises to 6.2%
• Blog: Let's get the bad times over quickly
• IoD warns that UK GDP growth will fall
• First quarter sees leap in failures

Related links

• Office for National Statistics