UK Inflation Falls to 2.6% Amid Global Trade Pressures

Inflation rates in the United Kingdom saw a significant decline in March 2025, with the consumer price index dropping to 2.6%, compared to 2.8% in February, marking its lowest level since October 2024. This drop was driven by lower fuel prices and stable food costs, despite a rise in clothing prices

However, inflation remains above the 2% target set by the Bank of England, and it is expected to rise to around 4% in the summer due to higher utility bills. Markets expect the Bank of England to cut interest rates at its upcoming meeting on May 8, 2025, in response to these inflationary pressures

On another front, data showed a 5.4% increase in house prices and a slight rise in rent prices, reflecting ongoing cost-of-living pressures on British households. Regarding investment, Goldman Sachs predicted that gold prices could reach $3,700 per ounce by the end of the year, supported by increased demand from central banks and investors

Is it related to recent U.S. tariffs

Regarding trade policies, the U.S. recently imposed new tariffs on critical mineral imports, raising concerns in global markets. In response, China imposed a 125% tariff on certain U.S. goods, further exacerbating trade tensions between the world’s two largest economies

Markets expect these tensions to continue affecting the British economy, with potential negative impacts on economic growth and inflation in the near future