British inflation rate remains at zero in March

British inflation rate remained at zero in March, the lowest reading since records began, official data showed Tuesday.

Britain's consumer prices index (CPI) grew by 0 percent in the year to March 2015, with food and non-alcoholic beverages and transport costs' drop offsetting the rise in the costs of education, restaurant and hotels, and alcohol and tobacco, data showed by the Office for National Statistics (ONS).

British consumer prices edged up by 0.2 percent in March 2015 from the previous month, and the core annual inflation rate, which exclude alcohol, tobacco, food and energy prices, rose 1.0 percent on year-on-year basis, data showed.

CPIH, an inflation gauge include consumer prices and owner occupier's housing costs, increased 0.3 percent in the 12-month to March 2015, unchanged from February 2015, data also showed.

Vicky Redwood, Chief UK Economist at Capital Economics, commented in a note that Britain just avoided deflation in March, but inflation could yet dip into negative territory at some point in the coming months, as the indirect impact of lower energy prices will take a while to come through.

The London-based economic forecaster reckons that the low inflation rate should help the economic recovery to pick up speed again after the slight slowdown that may have occurred in the first quarter of 2015.

Martin Beck, senior economic adviser to the EY ITEM Club, said: "We expect inflation to remain close to zero until the latter months of this year, at which point the base effects, caused by the collapse in oil prices, will begin to kick in."

"But core inflationary pressures are likely to remain well contained, ensuring that inflation remains below the two percent target for a prolonged period. Therefore, while the threat of 'noflation' becoming entrenched looks low, there is equally little threat of inflation taking off," he said.

The Bank of England, or the British central bank, sets the inflation rate target at 2 percent.

He added: "Against this backdrop we continue to expect the Bank to wait until early 2016 before raising interest rates, with consumers continuing to enjoy a healthy boost to their spending power in the interim." Endit