Coronavirus: Plunge in clothing and fuel costs help inflation ease to 1.5% | Business News

Falling clothing and fuel prices drove an easing in the rate of inflation as the UK geared up for the coronavirus lockdown, official figures have shown.

The Office for National Statistics (ONS) said the Consumer Prices Index (CPI) measure slowed from an annual rate of 1.7% in February to 1.5% last month – a level last seen in November.

The data charted the first fall in prices for clothing and footwear over the period since 2015 – given that spring fashion lines are usually available and popular in the shops in anticipation of good weather ahead.

The category was 0.3% down on the month compared to a 1% increase last year.

The ONS said it measured prices on 17 March – days before the COVID-19 lockdown began which shuttered high streets – but said it was likely consumer and retailer behaviour was already influenced by the coronavirus pandemic on that date.

A 0.6% fall in transport costs came almost entirely from fuel as global oil prices plunged, the ONS said.

Petrol prices fell by 5.1p per litre between February and March, the biggest drop since December 2018.

How will oil slump hit the economy?

Food and drink costs were measured as flat despite stockpiling by supermarket shoppers.

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 due to some retailers 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.”

Yael Selfin, chief economist at KPMG, said of the figures: “Record low oil prices and a weak economic environment are expected to see further falls in inflation this year.

“We now expect inflation to average only 0.7% in 2020 and 1.3% next year, giving the Bank of England ample room to keep interest rates low for longer.”

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