Figures from the Office for National Statistics show the headline rate of inflation in the UK fell to 2.3 per cent during March, a 0.4 per cent fall on February's figure of 2.7 per cent.

The fall was partly due to reductions in mortgage rates following the Bank of England interest rate reduction in February.

The underlying rate of inflation, which excludes mortgage interest payments, remained unchanged at 1.9 per cent in the year to March

With underlying inflation remaining below the government target of 2.5 per cent, further interest rate reductions remain on the cards. Minutes from the Monetary Policy Committee of the Bank of England indicate that three of its nine members favoured a 0.5 per cent cut instead of the quarter point cut eventually agreed upon.