You are here: Home - Household Bills - News -

Fuel and clothing prices drag inflation down to 1.5% in March

0
Written by:
22/04/2020
UK inflation fell to 1.5% in March, driven mainly by falling fuel and clothing prices before the lockdown started.

The Consumer Prices Index (CPI) fell 0.2 percentage points from 1.7% in February, according to data from the Office for National Statistics (ONS).

The ONS said the largest downward contribution to the change in the inflation rate came from clothing and footwear, where prices fell by 0.3% between February and March, compared with a rise of 1% between the same two months a year ago.

Mike Hardie, head of inflation at the ONS, said: “Clothing prices normally rise between February and March as new year discounting ends. However, this year the price of clothes has eased due to some retailers offering discounts due to decreased footfall in stores before the lockdown started.”

Falling fuel prices also contributed to the lower inflation rate. They have been dragged down by the plummeting oil price in response to reduced global demand during the Covid-19 pandemic.

Petrol prices fell by 5.1p per litre between February and March, compared with a rise of 1.2p per litre for the period a year ago, marking the largest monthly fall since December 2018, while diesel fell by 5.5p per litre, the largest monthly drop since August 2015.

Richard Pearson, director at investment platform, EQi, said: “Inflation is a key indicator for future economic growth and this morning’s figures, covering March, start to paint a picture of potential damage to come for the UK. But the worst is likely yet to come in next month’s numbers.

“The ONS reported a 0.2% drop, with plummeting costs of clothing and motor fuels the most significant contributor. Though a definite concern, this isn’t unexpected with so many curbing non-essential travel and other purchases in preparation for the rumoured lockdown.”

Laura Suter, personal finance analyst at investment platform AJ Bell, said: “Savers will welcome the news of a drop in inflation, as they have been pummelled with two further falls in the Bank of England base rate this year and a multitude of cuts to interest rates on savings accounts.”

However, she pointed out that no easy access account currently beats or matches inflation, meaning savers with money in these accounts are losing money in real terms.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Travel firms and airlines are ‘breaking the law’ on refunds for cancelled holidays

The UK’s biggest travel operators and airlines are breaking the law by delaying refunds for cancelled trips or removing customers’...

Close