Inflation jumps to 3.4%

The Consumer Prices Index (CPI), the Government's preferred measure of inflation, increased from 3% in February. The rise is greater than analysts had expected, with most predicting annual inflation would hit 3.2%. An alternative inflation measure, the Retail Prices Index (RPI) jumped sharply, up from 3.7% to 4.4%. A rise in CPI could lead to the Bank of England increasing its base rate, while the RPI jump may lead to higher pay increases during wage negotiations.