Official data released on Wednesday showed that annual inflation in the United Kingdom dropped more than expected in March, falling to 2.6% from 2.8% in February—its lowest level in three months.

A Reuters poll of economists had forecast a reading of 2.7%, aligning with projections made by the Bank of England (BoE) in February. However, the actual figure came in lower than both estimates.

According to the Office for National Statistics (ONS), the decline was mainly driven by lower fuel prices and stable food costs, despite a notable rebound in clothing prices following an unexpected dip in February.

While this slowdown offers some temporary relief, the BoE still anticipates a rise in inflation later this year. Its latest forecasts suggest inflation could peak at 3.7% in the third quarter—nearly double the central bank’s official 2% target—driven primarily by higher energy prices and customs tariffs.

Since the release of these forecasts, global economic uncertainty has increased, partly due to sweeping trade tariffs imposed by former U.S. President Donald Trump, raising the risk of a broader economic slowdown that could affect the UK outlook moving forward.