Money latest: Inflation fall is lower than expected - use our tool to see what prices have gone up and down (2024)

Travellers have been warned trips abroad will cost more this year as cities across Europe increase tourist taxes.

Tourism taxes range anywhere between less than €1 to almost €15 and can be charged per person per night.

People looking to book a trip abroad are being encouraged to incorporate additional costs into their holiday budget to avoid being left out of pocket.

Travel insurance expert Tiffany Mealiff said the fees allow cities to fund measures to attract more visitors, support local infrastructure and prevent problems caused by overtourism.

"If you’re taking a trip to any city in Europe this year, you must be aware of the potential additional costs to your holiday – which are often not obvious beforehand and normally due for payment when you check out of your accommodation," Ms Mealiff, from Quotezone.co.uk, said.

Here are some of the charges in popular European destinations:

Venice

Tourists visiting Venice for the day will have to pay a €5 (£4.27) entry fee to enter the city between the hours of 8.30am and 4.00pm. The scheme is currently going through a trial period, but it is expected to come fully into force in next year.

Manchester

The city introduced a £1 per room per night tourist tax across 73 hotels to fund improvement measures to attract more tourists.

Barcelona

A recent increase to the existing tourist fee means visitors now pay €3.25 (£2.78), up from €2.75 (£2.35), to stay in some accommodation.

Lisbon

The Portuguese capital enforces a €2 (£1.71) per person fee for every night tourists stay but it is only applied for a maximum of seven nights.

Athens

Tourist tax in Athens varies depending on the hotel category and the time of year, ranging anywhere from €0.50 (43p) - €10 (£8.54) per room per night.

Dubrovnik

Visitors to Dubrovnik must pay €2.65 (£2.26) per person per night throughout April to September. The Croatian government has temporarily reduced this fee to €1.86 (£1.59) for the rest of this year.

Paris

France charges visitors a tourist tax, which varies depending on the type of accommodation. The most expensive charge is €14.95 (£12.77). Those staying in a typical four-star hotel are charged around €8 (£6.83).

Prague

For visitors to Prague, tourist tax has increased from 21 to 50 CZK each day (71p - £1.69).

Budapest

Tourists staying in Budapest are charged an additional 4% each night, which is calculated based on the price of the room.

Berlin

Tourists must now pay 5% of the room price, excluding VAT and service fees.

Prices in March were 3.2% higher than prices at the same time last year, putting pressure on already stretched household budgets.

This figure, the lowest since 2021, is inching closer to the Bank of England's 2% target.

Food prices rising by less than they did last year was the biggest driver of March's overall inflation rate fall. That was partly offset by fuel prices rising this year when they were falling in March 2023.

A fall in inflation doesn't mean prices are coming down, but that they're rising less quickly.

Use our calculator to see how much your groceries, clothing and leisure activities have increased in cost.

By James Sillars, business reporter

It was a messy day for shares across Europe yesterday, and things only looked marginally better as the latest session got under way.

The FTSE 100 opened fractionally lower at 7,817 after bleeding 1.8% of its value by yesterday evening's close.

Losses then came across the board - largely reflecting growing fears that the United States will not be cutting interest rates for the foreseeable future.

A hot economy there is not giving the Federal Reserve scope to cut borrowing costs across the pond, and that does not bode well for prospects of interest rate cuts on this side of the Atlantic.

That is because interest rate cuts tend to weaken a domestic currency.

A higher dollar versus the pound would raise the cost of importing goods and services priced in dollars, such as oil, meaning they would become more expensive and stoke inflation.

Just weeks ago, sterling was trading at $1.27. Today, a pound gets you just $1.24.

Among the shares doing well on the stock market today were those of ASOS - up by more than 7% - despite publishing first-half losses.

ASOS was more bullish on its prospects over the medium term despite continuing challenges from steep competition, mainly from China, and excess levels of clothing stocks.

On the face of it, the March inflation figures are good news, with the headline Consumer Prices Index measure falling from 3.4% in February to 3.2% and the core measure, which strips out volatile elements such as energy, food, alcohol and tobacco, falling from 4.5% in February to 4.2%.

However, both figures are higher than expected, with the market having looked for CPI of 3.1% in March and core inflation of 4.2%. To that extent, the figures are a disappointment.

It is, though, the third consecutive month during which CPI has fallen, and the good news is that there is almost certain to be a fourth decline when the numbers for the current month, April, are published.

That is because the cap on household energy bills imposed by the energy regulator Ofgem fell at the start of the month and that, all things being equal, should bear down on inflation further.

That caveat is important because there is still inflation in the system.

On the eve of Iran's weekend attack on Israel, the oil price had risen by 17% since the beginning of the year, with Brent crude last Friday hitting $92.18 at one point – a level not seen since 23 October last year.

That is already feeding through to the headline rate of inflation: the Office for National Statistics noted today that the largest upward contribution to March CPI coming from motor fuels – the price of which fell in March last year but which rose in March this year.

In time, this up tick in oil prices will feed into all kinds of other prices in the inflation basket, including food, drink and other manufactured goods.

This effect can also be observed in other parts of the world.

The March CPI figure in the United States came in at 3.5% - up from 3.2% in February and the third consecutive month that inflation had come in ahead of expectations.The American experience is a reminder, should one be needed, that inflation does not come down in a straight line.

The other recent lesson from the US is that inflation is proving stickier than expected – something that the Bank of England governor Andrew Bailey and his colleagues on the Monetary Policy Committee know only too well.

At the beginning of the year, the market was expecting five, maybe even six, interest rate cuts from the US Federal Reserve. Now it is expecting two at best. American consumers have money in their pockets and, judging from the unexpectedly strong retail sales figures published on Monday, they are spending it.

Accordingly, Jay Powell, the Fed's chair, has been busily talking down Wall Street’s expectations of rate cuts, telling a meeting at the IMF and World Bank's spring meeting in Washington on Tuesday that interest rate cuts this year might not be forthcoming unless the economy shows signs of slowing down.

None of this makes life easier for Mr Bailey and his colleagues.

Tuesday's jobs data for March provided a good example of the dilemma faced by the Bank: on the one hand there was evidence of a softening labour market, with the headline rate of unemployment creeping up from 3.9% to 4.2%, but on the other, regular wages rose by 6% during the month, which is significantly stronger than the MPC would want to see before cutting UK interest rates.

The MPC will also watching carefully to see that the recent strength in US inflation does not feed into higher prices of goods imported from the United States to the UK.

The financial; markets are now coming round to the view that the Bank of England may now cut interest rates before the Fed – with the European Central Bank moving before either of them.

As for the UK government, which also faces an election this year, it has to hope that inflation does keep coming down and that consumers will start to feel better about life.

You can read King's full analysis here...

We've been taking a closer look at some of the ONS inflation data...

It shows inflation for food and non-alcoholic drinks dipped to 4% for the month, from 5% in February.

This is its lowest level since November 2021.

The increased slowdown was partly driven by a fall in meat prices and lower rises for bread and cereals, the ONS said.

Furniture and household goods prices also contributed to the fall, with prices in the sector falling by 0.9% in March compared with the same month last year.

Elsewhere in retail, clothing and footwear inflation also slowed to 4% for the month, from 5% in February, after women's clothing stores increased prices by less than normal for this time of year.

The largest upwards pressure came from motor fuels, after the average price of petrol rose by 2.6p per litre between February and March 2024 to stand at 144.8 pence per litre, according to the ONS.

After the lower-than-expected fall in inflation, Coventry Building Society has announced it is increasing all its fixed rate deals.

Although it hasn't said how much the offers will rise by, it has said it will affect new and existing residential and buy-to-let customers.

The higher rates will be introduced at 8am on Friday, it said.

The announcement has been met with disappointment by brokers, who say it is "another major ripple of increases".

"This is disappointing news. Swap rate increases continue to hammer mortgage borrowers, and lenders have no choice but to pass on those higher costs," Justin Moy, the managing director at EHF Mortgages, said.

"The 48-hour notice Coventry Building Society provides is always appreciated by brokers and borrowers, but this is just the start of another major ripple of increases that will only disappoint those coming off cheaper deals and looking to buy," he told Newspage.

Lewis Shaw, owner and mortgage expert at Shaw Financial Services, warned: "There may be more mortgage misery on the cards after the latest CPI print shows the economy is still running hotter than expected."

Michelle Lawson, director at Lawson Financial, said: "No surprises here following this morning's inflation decrease as it wasn't as low as markets expected.

"More than anything we need stability but the mixed messages being sent out to borrowers remain. This appears to be the new norm for now."

Andrew Bailey has signalled the UK is still on course for an interest rate cut as official figures show a further easing in the pace of price growth in the economy.

Our business reporter James Sillarslooks closely at the governor's comments here:

While we have seen inflation fall slightly, the UK's figure still remains one of the highest in the G7.

Our headline rate of 3.2% is nearly 1% more than Germany, which as recorded a 2.3% rate.

The US is still sitting above the UK, with an expected rise from 3.2% in February to 3.5% in March.

Rishi Sunak has celebrated the new inflation data, despite it falling by less than expected.

The prime minister says inflation is now at the lowest it's been for more than two and a half years...

It's important to say that although the figure is moving in the right direction, it is still a way off the government's 2% target.

Ourbusiness presenter Ian King has given his first reaction to the newly released inflation data.

He says "on the face of it" the latest figure is "good news", but the bad news is the market was probably looking for a "slightly bigger fall".

"The forecast had been for the headline rate of inflation had been down to 3.1%, so the number has come in ahead of expectations but nonetheless it does mark a continue decline in inflation," he says.

The important figure, however, will be released next month.

"The number we are looking out for - to be perfectly honest with you - is what happens for the month of April because at the beginning of the month the energy price cap came down and that is expected to feed through," he says.

"On the whole, it's pretty good news, but perhaps not as good as we had expected.

"It just reiterates the fact that inflation does not always come down in the way that people expect it to."