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Cheaper clothes and fuel sees UK inflation fall to 1.5% in March Cheaper clothes and fuel sees UK inflation fall to 1.5% in March
(32 minutes later)
The UK's inflation rate fell to 1.5% in March, largely driven by falls in the prices of clothing and fuel. The UK's inflation rate fell to 1.5% in March, largely driven by falls in the prices of clothing and fuel ahead of the coronavirus lockdown.
The Consumer Prices Index (CPI) fell 1.7% in February, according to the Office for National Statistics (ONS). The Consumer Prices Index (CPI) fell from 1.7% in February, according to the Office for National Statistics (ONS).
The ONS said that clothing prices dropped as shops offered discounts as footfall fell just before coronavirus lockdown measures were introduced. The ONS said that clothing prices dropped as shops offered discounts as footfall fell just before self-distancing measures were imposed.
Prices of clothes and shoes fell by 1.2% in the year to March 2020.Prices of clothes and shoes fell by 1.2% in the year to March 2020.
ONS head of inflation Mike Hardie said: "Clothing prices normally rise between February and March as new year discounting ends.ONS head of inflation Mike Hardie 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.""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."
He added: "The cost of raw materials for manufacturers fell significantly over the year, driven by a global fall in the price for crude oil, which is at its lowest level since early 2016." The British Retail Consortium has previously warned that thousands of jobs could be at risk as High Street shops come under pressure amid the coronavirus pandemic.
'Recession'
The fall in inflation in March was also partly due to the collapse in oil prices on global markets filtering through to prices at the pump.
Average petrol prices stood at 119.4 pence per litre, the lowest seen since February 2019, while diesel stood at 123.8p.
Mr Hardie added: "The cost of raw materials for manufacturers fell significantly over the year, driven by a global fall in the price for crude oil, which is at its lowest level since early 2016."
The UK benchmark for oil has fallen to about $16 (£13) a barrel as economic activity has slowed.
Sarah Hewin, senior economist at Standard Chartered bank, told the BBC's Today programme: "We have seen oil prices falling quite substantially, and that is likely to be a factor going forward.
"It was trading at over $60 a barrel - today it's down at $16. That's over 75% down since the start of the year."
She added: "Normally low inflation would be welcomed as it means people have effectively more to spend in the shop but these are not normal circumstances. The fall in inflation, in addition to low energy prices, is an indication of the steep recession we will see in the coming months."
What do I need to know about the coronavirus?What do I need to know about the coronavirus?