The figure was the lowest rate of Consumer Prices Index (CPI) inflation since estimates of the measure began in the late 1980s. Cheaper clothing and footwear have helped maintain the 0% growth which have also been offset by recent low petrol prices.
However, the ONS said that if the rate of inflation was calculated to two decimal places, prices were 0.01% lower than a year before – the first fall on record for the CPI measure.
Graham Spooner, investment research analyst at The Share Centre, explains what the latest inflation figures means for investors.
“This morning, the Office for National Statistics reported that UK Inflation had remained at zero during March, meaning prices were unchanged year-on-year. It was reported that the consumer price index actually dropped by two negative places to 0.01 per cent, which the ONS officially rounded up to zero. Britain came extremely close to negative inflation, which will be of no surprise to investors. This has increased the chance of a temporary move into deflation in the months ahead and investors will be hoping we don’t see negative inflation for a prolonged period of time.
“A fall in clothing and oil prices produced the largest downward contributions to the change in the inflation rate. However, these were offset in March by a rise in the price of fuel and smaller upward contributions from products such as food. It is hoped this will encourage consumers to spend that bit more.
“Whilst these figures, along with uncertainty caused by the upcoming election, may mean investor hold off, we feel that as the economy continues along the path to recovery the equity market still represents the most attractive asset class for investors.”