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Falling demand for clothes as shoppers stayed away from the high street in March amid the unfolding coronavirus crisis has pushed down UK inflation, according to official figures.
Highlighting the economic fallout from the global health emergency, the Office for National Statistics said the consumer price index (CPI) fell to 1.5% last month, from 1.7% in February, driven down by clothing costs and the plummeting global oil price.
Clothing and footwear prices, which typically rise between February and March as retailers gear up for the spring season, fell over the period for only the second time since comparable records began in 1988, with a slide of 0.3%.
Although the ONS collected its price data around 17 March, before the formal government lockdown was introduced six days later, it said the rapidly escalating nature of the coronavirus outbreak at that time influenced sales patterns across Britain.
The government statistics agency said a number of factors might have contributed to the change, including less browsing in physical stores, people spending more time at home, and a shift in spending towards other necessities such as food and cleaning products. Early surveys suggest the price of some high-demand products has risen sharply since the onset of the crisis.
Laura Suter, a personal finance analyst at the investment platform AJ Bell, said: “With retailers having to shut their doors we’re seeing more and more offer discounts to shoppers to move their buying online.
“In particular clothing and department stores have been hit, as people don’t need new outfits to sit on their sofa all day and are delaying large purchases amid worries about where the economy is headed.”
Falling transport costs also dragged down inflation as the global price of oil fell in response to dwindling demand for crude as the pandemic intensified, and as Saudi Arabia and Russia entered a price war, refusing to cut output levels.
As the global oil price dropped from more than $60 (£48) a barrel to around $20, prices at petrol and diesel pumps in Britain fell by more than 5p per litre between February and March. The ONS said demand also probably fell amid the onset of measures to contain the spread of Covid-19, including increased working from home and travel restrictions.
Economists expect inflation to fall further in the coming months after US oil prices turned negative for the first time on record on Monday, amid the rapidly escalating economic fallout from the global health emergency.
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