The Office for National Statistics (ONS) said that the British Consumer Price Index (CPI) inflation rate fell to 1.5% in March 2020. ONS official Mike Hardie said: Inflation slowed again in March, mainly due to lower prices for clothing and motor fuel. Clothing prices typically increase between February and March as early-year discounts end. However, clothing prices have dropped this year because some retailers have seen a decrease in store traffic before the “city lockdown” began. In addition, due to the decline in global crude oil prices, raw material costs for manufacturers have dropped significantly this year. This is the lowest level of global crude oil prices since the beginning of 2016.
ONS said the average price of clothing and shoes fell by 1.2% in the year to March 2020. The ONS also said the average price for petrol this month was 119.4p a liter, the lowest since February 2019, and for diesel 123.8p. The British oil benchmark has fallen to around $16 a barrel (£13) as economic activity slows. It’s down about 75% since the beginning of the year.
Economists warn that inflation could slip to 0.5% in 2020 as the economy shrinks.
