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The UK rate of inflation fell to 1.5% in March, data published by the Office for National Statistics (ONS) has revealed.
The data showed that the Consumer Prices Index (CPI) fell from 1.7% in February. Falls in the prices of motor fuels and clothing contributed to the reduction. The ONS has warned that people are spending less in shops and more on necessities such as food.
The CPI currently sits below the Bank of England’s 2% inflation target. In March, the Bank cut interest rates in order to help support the UK economy during the coronavirus (COVID-19) pandemic. Interest rates are currently at their lowest level in the Bank’s history.
‘Normally low inflation would be welcomed as it means people have effectively more to spend in the shop, but these are not normal circumstances,’ said Sarah Hewin, Senior Economist at Standard Chartered Bank.
‘The fall in inflation, in addition to low energy prices, is an indication of the steep recession we will see in the coming months.’
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