12th April 2011
A fall in the cost of food and drink were the main factors behind the fall. The Guardian reported that the news wrong-footed City analysts who had been predicting that inflation in March would edge closer to 5%.
The ONS release showed that inflation as measured by the Retail Prices Index – traditionally used as the benchmark for pay deals – also fell last month, from 5.5% to 5.3%.
Mindful Money's economist blogger Shuan Richards writes about it here.
Vicky Redwood, UK analyst at Capital Economics, told the Guardian that the respite may only be temporary.
Even so the news could prove to be a respite for savers, according to Schroders.
The asset manager revealed that almost a third of the 14 million people who received a lump sum via an inheritance or work-based bonus invested the money in a high street savings account, paying an average of between 0.16% and 0.23% interest over the last year.
Schroders said its research indicated people were not exploring the variety of investment options available, as just one-in-twenty (6%) of those surveyed invested their windfall in stocks and shares and just 2% in unit trusts.
Almost half (of those receiving a lump sum of at least £500 didn't seek advice on how to use these funds from anyone, perhaps because they didn't want to reveal their windfall or felt they knew best how to use the funds.
Less than one-in-10 sought professional advice, with just 4% speaking to an Independent Financial Adviser and 4% speaking to their bank.
Robin Stoakley, managing director of Schroders' UK Intermediary Business said: "It is disappointing that people are seeing the real value of their savings eroded by relying on high street accounts that have offered record low returns on investments in the last two years.
"Inflation is eroding the real value of monies held in many of these accounts, so people looking to invest a financial windfall should explore other investment options (with the level of risk they are willing to take in mind) to ensure they get the most out of their money."
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