UK CPI inflation jumps to 0.7% in March 2021, says ONS

Summary

  • CPI-based inflation rate in the UK ticked up to 0.7 per cent in March 2021.
  • Fuels and clothing contributed the most towards the upward movement. 

The annual consumer price indicator (CPI) based inflation rate in the United Kingdom ticked up to 0.7 per cent in March this year largely due to the rising fuel prices. According to the data released by the Office for National Statistics (ONS), the CPI inflation rose by 0.7 per cent in the 12 months to March as compared to the 0.4 per cent increase to February.

However, the March rise in the CPI inflation remained well below the reading recorded in March 2020. In the same month a year earlier, an inflation growth of 1.5 per cent was registered. As per the ONS, the meaningful appreciation in the prices of motor fuels, clothing and transport contributed the most towards the upward movement in CPI 12-month inflation rate.

Jonathan Athow, Deputy National Statistician for Economic Statistics at ONS has said that increase in petrol prices and recovery in clothes recovering from the falls seen in February, led to increase in rate of inflation.

CPI inflation March 2021: Key highlights

  1. The consumer prices index including the owner occupiers’ housing costs (CPIH) increased by 1 per cent in the 12-months to March 2021, with the transport sector emerging as the largest upward contributor by adding 0.44 percentage points.
  2. The CPIH inflation stood at 0.7 per cent in February 2021. The component recorded a rise of 0.2 per cent in March 2021, on a month-on-month basis.
  3. Between February and March this year, the uptick in the prices of fuels and clothing steered a considerable upswing in the 12-month CPIH inflation rate.
  4. On the contrary, the substantial rise in the prices of fuels and clothes was partially offset by the drop in the prices of food and non-alcoholic beverages.
  5. According to the ONS data, the petrol prices in the UK stood at GBX 123.7 per litre in March 2021 as against a per litre price of GBX 119.4 in March 2020.
  6. Surprisingly, the contributions from the clothing and footwear sector to the headline inflation rate remained negative in March 2021, irrespective of the increasing price in the corresponding month.
  7. Notably, the ONS identified about 67 CPIH components that remained unavailable in March 2021 due to the pandemic-induced restrictions in place. These 67 items accounted for 8.2 per cent of the basket by weight.
  8. Subsequently, the ONS collected a weighted total of 82.2 per cent items of the comparable coverage collected before the first lockdown. In February, the unavailable items stood at 69.

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