The Consumer Price Index (CPI) including owner-occupied housing costs (CPIH) rose by 3.4% to March 2025. This rate was down from 3.7% recorded to February. On a monthly basis, the index rose by 0.3% in March 2025. This compares to a 0.6% increase in March 2024.
The Consumer Price Index (CPI) rose by 2.6% to March 2025. This compares to a 2.8% increase in the same period the previous year. On a monthly basis, the change was 0.3% in March 2025, compared to 0.6% in March 2024.
Contributions to Monthly Changes
The leisure and culture and motor fuel sectors contributed significantly to the slowdown in inflation. Housing services also showed a further downward impact. In contrast, clothing supported the rise in the index, albeit partially. Core Inflation and Price Changes
Core inflation (excluding energy, food, alcohol, and tobacco) rose by 4.2% through March 2025. This rate decreased from 4.4% recorded through February. Goods inflation also declined from 0.8% to 0.6%. Services inflation also slowed from 5.7% to 5.4%.
Monthly Data – Consumer Price Index
The Consumer Price Index (CPI) has been rising steadily in recent months. Despite slight variations between the two indices (CPI and CPIH), they reflect a common general trend. Out-of-pocket housing expenditure accounts for approximately 17% of the CPIH, which explains some of the differences between the two indices.
Components Affecting Annual Inflation
Between February and March 2025, contributions of seven sectors to the inflation rate declined. In contrast, the contributions of only the clothing and footwear sectors increased. Recreation and culture, housing, and transportation were the largest contributors to the decline. Entertainment and Culture
The entertainment and culture sector recorded its lowest inflation rate since October 2021. The rate reached 2.4% in March 2025, compared to 3.4% in February. Prices were impacted by a decline in toys.
Housing and transportation services
Housing and household services prices rose 5.1% year-on-year in March. This rate declined from 5.3% in February. Lower housing costs for homeowners contributed to the decline. The transportation sector rose 1.2% over the 12 months, down from 1.8% in February. Fuel prices fell 5.3% year-on-year, lowering the overall inflation rate.
Restaurants and Hotels
Inflation in this sector was 3.0% in March 2025, the lowest since July 2021. Hotel accommodation contributed to the decline, due to lower price increases than the previous year.
Food and Non-Alcoholic Beverages
Prices rose 3.0% in March 2025, compared to 3.3% in February. Confectionery prices declined, while milk, cheese, and eggs prices rose.
Clothing and Footwear
Prices in this sector rose 1.1% year-on-year, compared to a previous decline of 0.6%. It recorded a monthly increase of 2.3%, higher than last year’s increase. This was the result of unusual changes in price reductions between January and March.
Annual Inflation of Core Goods and Services
The annual inflation rate for goods and services in March was 4.2%, down from 4.4% in February. Housing and vacation costs contributed to the decline. Contributions from the energy and recreational goods sectors also declined.
Sectors with the Most Impact
The largest contributions to inflation came from housing, restaurants, and hotels. The housing sector’s contribution fell from 1.57 to 1.51 percentage points. The contribution from restaurants and hotels also fell from 0.40 to 0.35 percentage points, the lowest level since January 2022.
Additional Indicators
The Retail Price Index (RPI) showed inflation of 3.2% in March 2025. The CPIH methods are expected to be incorporated into the RPI by 2030 to address shortcomings. International Comparisons
The UK inflation rate reached 2.6% as of March, surpassing France and Germany. For example, it was 0.9% in France and 2.3% in Germany.
Data Sources and Quality
We are implementing a transformation program for consumer price statistics, which includes identifying new sources, improving methods, and developing systems. Our article, “Consumer Price Statistics Transformation: August 2024,” published on 6 August 2024, contains more information about the project and ongoing transformation plans. We also published “Consumer Price Statistics Transformation Plan: Updated” in August 2024, outlining the rationale for our priorities and their potential impact.
As part of the transformation, and starting with the publication of February 2025 figures on 26 March 2025, we have introduced improved calculation methods, consumer bands, and improved statistics for private rental prices in Northern Ireland. These changes will also apply to household cost indices from February 2025 (scheduled for publication on 29 May 2025). We have published an analysis of the impact of the UK Consumer Price Statistics Transition: January 2025, to provide users with indicative indicators of the effects of the improvements from January 2019 to June 2024.
Moving from Typical Items to Broader Consumption Sectors
The Consumer Price Index (CPI) for “All Goods” and the Consumer Price Index, including Owners’ Housing Costs (CPIH) series contain price information for a wide range of goods and services. From March 2025, the process of compiling this detailed information has changed, as a necessary step towards integrating larger and more detailed datasets into the Consumer Price Indices.
Goods and services are classified into “consumption bands” for different expenditure categories. In some cases, we have defined these consumption bands to correspond to a single “item” whose prices are tracked by Office for National Statistics (ONS) over time. However, where more comprehensive source data are available, or are expected to become available, each consumption band typically includes more than one item. For simplicity, we continue to refer to “items” in the Statistical Bulletin and the detailed briefing note.
