UK CPI increased 0.3% MoM (vs 0.4% MoM expected) and 2.6% YoY (vs 2.7% YoY expected) in March, down from 2.8% YoY in February.

• Core inflation was 0.5% MoM and 3.4% YoY, down from 3.5% YoY previously and in line with forecasts.
• Goods inflation eased from 0.8% YoY to 0.6% YoY while services inflation saw a sharper slowdown from 5.0% YoY to 4.0% YoY.
• Recreation & culture was a major driver of disinflation, as the segment was unchanged on monthly basis (vs 0.9% MoM a year ago). The annual rate slowed -1.0 ppts to 2.4% YoY.
• There was also disinflation evident in communication and restaurant & hotels as their annual rates fell -1.3 ppts to 6.0% YoY and -0.4 ppts to 3.0% YoY respectively.