Inflation falls as clothing and footwear prices see slow growth

INFLATION has unexpectedly fallen to a one-year low, with a smaller rise in clothing and footwear prices providing further relief for cash-squeezed households.

Figures from the Office for National Statistics (ONS) show the Consumer Prices Index (CPI) fell to 2.5% in March, compared with 2.7% in February and holding below the 3% recorded in January.

Economists were expecting inflation to hold steady at 2.7%.

The largest downward pressure came from footwear and clothing, having risen by just 0.7% on a monthly basis in March compared with 2% over the same period in 2017, which had been a relatively large rise compared with previous years.

Sterling fell 0.5% against the dollar to 1.42 following the news. Against the euro, the pound was trading 0.3% lower at 1.15.

ONS head of inflation Mike Hardie said: “Inflation fell to its lowest rate in a year, with women’s clothing prices rising slower than usual for the first time this year.

“Alcohol and tobacco also helped ease inflation pressures, with tobacco duty rises linked to the Budget not appearing this March, thanks to its new autumn billing.”

It meant tobacco prices rose just 0.1% in March, versus a 2% month-onmonth rise last year.

Food prices rose 0.3% compared with a month earlier, versus a 0.6% rise over the same period in 2017.

However, the cost of oil and fats surged 6.7% in March, past the 2.8% rise last year, with margarine applying notable upward pressure.