LONDON, May 2 - A leading indicator of underlying inflation in Britain slipped back slightly in March from a near two-year high in February, a leading research body said on Friday. The Economic Cycle Research Institute (ECRI), a New York-based body that specialises in monitoring turning points in the business cycle, said its Future Inflation Gauge fell to 106.2 from an upwardly revised 106.6 in February. The index's smoothed annualised growth rate dropped sharply to 2.2 percent from an upwardly revised 3.6 percent. "The UK FIG was pulled down in March mostly by weaker growth in raw materials prices and a fall in the percentage of purchasing managers reporting slower deliveries, along with a wider yield spread," ECRI said. "Despite the latest dip, the UKFIG is still in a cyclical uptrend, suggesting that U.K. inflation is still elevated." it added.
The official rate of underlying inflation, RPIX, which excludes mortgage interest payments, was steady at 3.0 percent in March, its highest since May 1998 and above the Bank of England's government-set target of 2.5 percent.//