Clothing prices fall despite rising inflation in March

As UK inflation rose to its highest level since December, driven by a sharp jump in diesel and petrol prices caused by the conflict in the Middle East, clothing and footwear prices fell in March due to intense market competition.

The rate of Consumer Prices Index (CPI) inflation increased to 3.3% in March, up from 3% in February, the Office for National Statistics said. The increase was in line with predictions from economists.

Higher motor fuel prices were the main driver of the acceleration in inflation, increasing by 8.7% month-on-month – the largest increase since June 2022, shortly after the Russian invasion of Ukraine.

Chief Economist at the Office for National Statistics, Grant Fitzner, said: "Inflation climbed in March, largely due to increased fuel prices, which saw their largest increase for over three years.

"The only significant offset came from clothing costs,  where  prices  rose by less than this time last year."

Clothing and footwear saw downward pressure on inflation, with prices decreasing by 0.8% for the month, the lowest level since March 2021.

This was due to sales and discounting activity, with the British Retail Consortium adding that the fall in prices was due to intense market competition.

This deflation in prices marks a stark contrast to February’s figures, when fashion prices saw notable upward pressure, with clothing and footwear costs rising 0.9% for the month - their highest level since March 2025 - after remaining flat in January.

Anna Leach, Chief Economist at the Institute of Directors, said: “As inflation has come in line with revised expectations, and given yesterday’s labour market data which showed a fall in vacancies and further downward progress in wage growth, interest rates should hold at next week’s MPC (Monetary Policy Committee) meeting.

"But there remains tremendous uncertainty over the outlook for energy supply and prices."