UK inflation drops to 4% in March

Consumer Prices Index (CPI) annual inflation fell by a surprise 0.4% to 4% in March as the cost of food and drink lowered, but it is still double the Bank of England's target.

The fall in CPI marks a drop from the 28-month high of 4.4% hit in February. By far the largest downward pressure to the change in CPI came from food and non-alcoholic beverages, where prices fell by 1.4% between February and March this year. This compares with a rise of 0.3% between the same two months a year ago. Retail Prices Index (RPI) inflation, which includes mortgage interest payments, fell to 5.3% from 5.5% in February. The fall in CPI will give a boost to Bank of England governor Mervyn King, who has resisted increasing pressure to raise the base interest rate from its...