The rate of inflation in the UK fell to 1.5% in March, down from 1.7% in February, according to new data published by the Office for National Statistics (ONS).

Figures for the latest ONS Consumer Prices Index were collected on 17 March, however, six days before the UK went into lockdown.

The data suggested the impact of coronavirus had already started to affect the inflation rate, with falls in the prices of motor fuels and clothing resulting in the largest downward contributions to the rate.

“Something to bear in mind is that the basket of goods measured for the official inflation reading is not reflective of what people are currently buying,” Killik & Co associate investment director, Rachel Winter, commented.

“For example, transport accounts for 12.1% of the basket, and restaurants and hotels for 9.6%, but most of us are spending zero on these two categories as we stick to the ‘stay at home’ instruction.
 
“It’s likely that the new ‘super products’ – food, cleaning and health products and even pet care – will remain in high demand for the next few months at the very least, and concerns have already been raised about price hikes in these categories. This may place additional pressure on households already feeling the strain with concern over job stability and wage growth, but an overall fall in price for less essential lines and record low interest rates should help.”

With inflation forecast to drop further over the coming weeks, the full impact of the coronavirus pandemic is expected to show in the figures, which Hargreaves Lansdown suggested should mean savers and investors in the UK will “need to act fast”.

“Normally falling inflation is good news for savers, who need less interest in order to keep up, so they can relax and watch their savings grow,” Hargreaves Lansdown personal finance analyst, Sarah Coles, said. “But there’s nothing normal about either the savings market or inflation figures at the moment – so we need to act fast.
 
“On the face of it, around three times as many accounts beat inflation this month as last month. But this masks the fact that the best rates are falling fast across the board – as a result of the rock-bottom base rate and a new bank funding scheme. Easy access savings accounts are cutting rates at speed, and a number of longer term fixes are being pulled.

“Fortunately a significant minority are holding firm, and some have even launched table-topping special offers in the past week. However, the special offers won’t last long, and there’s no guarantee how long the other rates will hold out either, so if you want to take advantage, you’ll need to act fast.”

However, OpenMoney CEO, Anthony Morrow, warned: “With low rates of return on cash and people concerned about their finances in the current economic climate, there is a danger that savers may be tempted by adverts for complex investments and take more risk with their money than they intend to in the hope of generating higher returns.
 
“Investors should beware of investments offering high returns as there may be real possibility of losing all your money very quickly. When thinking about saving and investing, rather than be tempted by complex investments offering high returns, first think about how much risk you are willing to take.”

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