The annual inflation rate eased slightly in March, falling from 10.4% to 10.1%, according to the latest figures from the Office for National Statistics (ONS).

Chancellor Jeremy Hunt said this shows that the Government is "on track" to meet its targets, with the OBR forecasting that inflation will drop to 2.9% by the end of the year.

Lower motor fuel prices played an important role in driving down inflation, falling by 5.9% compared to the same time last year.

Clothing and footwear costs also decreased, along with prices of furniture, household goods, restaurants and hotels.

However, higher bread, cereal and fruit prices and ongoing vegetable shortages saw food inflation rise to 19.1%, significantly offsetting the upward trend.

Persistently high inflation could cause the Bank of England (BoE) to raise interest rates further, with the next monetary policy committee meeting set for 11 May.

In response to the ONS's report, Kitty Ussher, chief economist at the Institute of Directors, said:

"Business remains extremely concerned by the rate of inflation and wants to see it under control.

"While it is a relief that the headline rate of inflation is now pointing downwards again, following the surprise rise last month, the BoE's job is not yet done."

Talk to us about your business costs.