UK Inflation Ticked Up In Mar

MAR CPI +0.3% M/M, +0.7% Y/Y VS +0.4% Y/Y FEB

MAR CORE CPI +0.4% M/M, +1.1% Y/Y VS +0.9% Y/Y FEB

MAR OUTPUT PPI +0.5% M/M; +x1.9% Y/Y VS +0.9% Y/Y FEB

MAR INPUT PPI +1.3% M/M; +5.9% Y/Y VS +3.3% Y/Y FEB

• Y/Y CPI edged up in Mar to 0.7%, coming in below market expectations (BBG: 0.8%) and showing the highest level since Jan. Nevertheless, this marks the 20^th straight reading below the BOE's 2.0% target.
• Core inflation gained 0.2pp to 1.1% in Mar, after dropping to 0.9% in Feb, confirming of market forecasts.
• The largest upward contribution came from transport and clothing and footwear, adding 18pp and 0.14pp, respectively, to CPI growth. The ONS noted that petrol prices rose in Mar 2021 compared to a fall in 2020 and clothes recovered from the falls seen in Feb.
• On the other hand, food inflation declined by 1.4% in Mar, showing the biggest downward contribution and shaving off 0.9pp from price growth.
• Output inflation rose by 1.9%, marking the third consecutive months of growth and was largely driven by transport equipment.
• Input inflation surged by 5.9% in Mar, its highest level since Oct 2018 and the fourth positive reading in a row after 10 consecutive months of decline. Metals and non-metallic minerals led the increase, while crude oil was the second largest driver, also due to a change in the weights.
• The service producer price index rose by 1.7% in Q1 2021, up from 0.4% in Q4 2020.

Source: Office for National Statistics