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Ammon News - UK inflation fell to 2.3% in April – its lowest level for almost three years – but the decline was smaller than expected, denting hopes of an early interest rate cut, according to the Guardian.

City analysts had forecast the annual increase in the cost of goods and services would fall to 2.1%, close to the Bank of England’s 2% target.

Markets responded by trimming their predictions that the Bank would cut rates from their current 5.25% level as early as next month, with forecasts of a reduction in August also scaled back.

Last month’s 2.3% fall in the consumer prices index (CPI), down from 3.2% in March, was driven by easing energy and food costs. The last time inflation was lower was in July 2021.