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Inflation Rate Remains At Zero In March

The UK inflation rate remained at 0% in March 2015, according to official figures.

Data from the Office for National Statistics (ONS) shows that overall prices did not grow at all for the second consecutive month.

The ONS said that falls in fuel and clothing prices helped to keep the consumer prices index (CPI) at zero.

This is the lowest recorded CPI rate since the measure was introduced in 1989.

Key figures for March 2015:

  • the falling price of food slowed slightly from -0.37% in February 2015 to -0.33% in March 2015
  • falling transport prices (which include the price of fuel) slowed to -0.29% in March 2015 compared to -0.41% in February 2015
  • inflation in clothing fell to 0% from 0.14% in February 2015.

Reaction

David Kern, chief economist at the British Chambers of Commerce, said:

“Continued low inflation is good news for the economy, particularly at a time when wage increases are modest and businesses are facing challenges.”

John Allan, national chairman of the Federation of Small Businesses, called on policy makers to prevent the country from slipping into a deflationary spiral:

“Despite the benefits low inflation has brought, we urge the Bank of England to remain vigilant, and ensure this does not become a long period of deflation.”

Rain Newton-Smith, director of economics at the Confederation of British Industry, said:

“Zero inflation in March comes as no surprise, given the drop in commodity prices we have seen for some time now. Inflation should start to pick up in the second half of the year, especially as the downward pressure from lower oil prices eases.”

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