UK Inflation Rate Stays at 0% in March


Consumer prices in Britain remained unchanged in March for the second consecutive month driven by a fall in prices of transport, leisure and food. It is the lowest rate since records began in 1989.

Year-on-year, prices of food and non-alcoholic beverages recorded the largest decrease (-3 percent), followed by transport (-1.9 percent), recreation and culture (-0.7 percent), miscellaneous goods and services (-0.5 percent), clothing and footwear (-0.2 percent) and furniture, household equipment and routine maintenance (-0.2 percent). 

Upward pressures came from education (+10 percent), alcoholic beverages and tobacco (+3.4 percent), health (+2.1 percent), restaurants and hotels (+2 percent), communication (0.9 percent) and housing, water and utilities (0.7 percent). 

On a monthly basis, consumer prices increased 0.2 percent, slowing from a 0.3 percent increase in February.

The largest downward contributions came from prices of clothing and footwear (-0.1 percent), mainly women’s outerwear, particularly trousers, dresses and cardigans. There was also a smaller downward effect from men’s outerwear.

Cost of housing and household services went down 0.4 percent, mainly due to gas prices and cost of food and non-alcoholic beverages fell 0.2 percent, mainly meat and fruit. 

In contrast, transport prices increased 0.7 percent, mainly due to motor fuels - average petrol prices rose by 3.8 pence per litre and diesel prices also rose by 3.5 pence per litre.

The core inflation rate which strips out increases in energy, food, alcohol and tobacco, slowed to 1.0 percent in March compared with 1.2 percent in February.

ONS | Joana Taborda | joana.taborda@tradingeconomics.com
4/14/2015 10:32:44 AM