Inflation unchanged at 0% in March

Consumer Prices Index measurement of inflation remains at record low.

The Office for National Statistics (ONS) has announced that the Consumer Prices Index (CPI) measurement of inflation was unchanged in the year to March 2015 at 0%.

That remains the record low for inflation, but deflation – which had been widely predicted – has been held off for another month at least.

According to the ONS the biggest falls in price over the period were in clothing, footwear and gas prices. For clothing and footwear, this is the firm time that prices have fallen at this time of year since CPI was introduced, as usually they rise following the recovery from the January sales period.

However this was balanced out by a rise in the price of motor fuels, as well as smaller increases on a range of products including food. Petrol prices rose 3.8 pence per litre over the month, while diesel prices jumped 3.5 pence per litre.

As there is essentially now 'no-flation', there is little prospect of any Bank Base Rate rise in the foreseeable future. The Bank of England still expects inflation to rise across the year though, eventually hitting its 2% target.

And while that means all savings accounts beat inflation, to get a truly decent return on your cash you should still look to the likes of tax-free Cash ISAs and also current accounts paying up to 5%.

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