According to official data released on Wednesday, the UK's consumer price inflation rate dropped to 10.1% in March from February's 10.4%, but still remained the highest in western Europe.

Economists had predicted a decrease to 9.8%, but the rate remains at double digits, eating into workers' spending power. The UK is the only country in the region with a double-digit inflation rate, after Austria had a higher rate in February.

This could lead to the Bank of England raising interest rates again next month, as core inflation, which excludes volatile food and energy prices, remained at 6.2%. The rising price of food and non-alcoholic drinks is a major contributor to the inflation rate, with an increase of 19.1% in annual terms, the biggest increase since 1977.

Finance minister Jeremy Hunt commented on the data, stating that it reaffirmed the need to drive down inflation to ease pressure on families and businesses. In February, the Bank of England had forecasted a March inflation rate of 9.2%, but last month it predicted a significant fall in the second quarter. Photo by Diliff, Wikimedia commons.