UK Inflation falls in March due to lower clothing and petrol prices

UK inflation slipped lower in March as shops remain closed and the lockdown slams the brakes on car travel.

Low inflation normally encourages consumers to buy goods and services. Low inflation also makes it more appealing to borrow money, since interest rates are usually also low during periods of low inflation. However, due to the lockdown imposed in the UK and the whole of Europe, consumer shopping trends have changed.

Online behemoth, Amazon, has experienced unprecedented demand since lockdown measures were imposed across the world. the world has changed and so have people’s shopping habits.

We are not buying fashionable clothes and we are not buying fuel for our cars, two of our normally consistent purchases have dwindled away due to the effects of the Coronavirus Pandemic.

Inflation Rates

The Office for National Statistics (ONS) said the rate of Consumer Price Index (CPI) inflation decreased to 1.5 per cent in March. Analysts at Pantheon Macroeconomics predicted that the headline rate of inflation would slow to 1.6 per cent.

CPI inflation was reported at 1.7 per cent in February, after declining slightly from the previous month. ONS head of inflation Mike Hardie said: “The inflation rate slowed again in March, mainly due to falling prices for clothing and motor fuel.

“Clothing prices normally rise between February and March as new year discounting ends.

“However, this year the price of clothes has eased because some retailers were offering discounts due to decreased footfall in stores before the lockdown started. 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 average inflation of Spain in 2020: 0.60 per cent