And the headline rate of inflation is still high compared with international peers. In the United States, the Consumer Price Index moderated in March, rising 5 percent from a year earlier, while the eurozone’s inflation rate eased to 6.9 percent.
While inflation is expected to slow sharply later this year because of lower energy prices, uncertainty remains about how quickly the pace of price increases will return to the central bank’s 2 percent target. Policymakers at the Bank of England have been closely monitoring private-sector wage growth and prices in the service sector for signs of how deeply inflationary pressures are becoming embedded in the economy.
On Tuesday, data from the statistics agency showed that wages excluding bonuses rose 6.6 percent in the three months to February, compared with the same period a year earlier, beating economists’ expectations. But there were also signs that Britain’s labor market was beginning to loosen, supporting bets that the Bank of England is close to halting rate increases. In February, for a second consecutive month, the pace of wage growth in the private sector slowed slightly, while the number of job vacancies fell and more people returned to the work force, Tuesday’s data showed.
Services inflation, which is heavily influenced by companies’ wage costs, held steady at 6.6 percent.
The Bank of England’s policymakers will meet again in early May to decide whether to raise interest rates again.