UK inflation falls to 1.1% in March

The UK's annual inflation figure fell to 1.1% in March, leaving it well short of the Bank of England's 2% target.

The figure is a measure of how much the UK's Consumer Price Index (CPI) has increased compared with the same period last year.

Major downward influences on the CPI included transport costs, clothing and furniture.

Spending on transport was influenced by relative confidence in future oil supplies, which caused petrol and diesel prices to increase by less than last year.

Also, many air fares within Europe have fallen this year whereas they increased in 2003.

Special offers across the furniture and clothing industries meant that prices either remained unchanged or posted lesser increases than last year.

Upward pressures on the CPI included price increases in games, toys and hobbies, gas and electricity services, and alcoholic drinks in restaurants and hotels.

The figures and analysis were released as part of a report by the UK's Office for National Statistics.

The report said: "As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate has been among the lowest in the EU since the start of 2000."

UK inflation is now at its lowest level since September 2002 but, despite this below-target performance, the Central Bank is still expected to raise interest rates next month.