Inflation was 2.6% down from a rate of 2.8% in February, according to the latest figures from the Office for National Statistics.
But the fall may only be temporary as analysts say it’s expected to spike from April as rising bills and higher business costs take hold.
Stuart Morrison, Research Manager at the British Chambers of Commerce, said: “A small drop in the rate of inflation is always welcome. However, businesses fear it is the calm before the storm over the months ahead.
“Today’s data for March, covers a period before the double whammy of minimum wage and national insurance rises. Businesses are already telling us they are putting up their prices, as they battle with rising employment costs.
“Our latest survey showed business concern about inflation at 53%, up from the previous quarter. The rising global trade war will also heap further price pressure on businesses and consumers.
“Inflationary pressures mean the Bank of England is likely to remain cautious over more interest rate cuts – just when firms are keen for some financial respite.
“Businesses desperately need a lifeline from policymakers. We need to see a tax roadmap, giving firms an idea of when business rate and national insurance pressures will ease. Ministers should also focus on infrastructure and exports as a clear path to business growth in these challenging times.”
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