The U.K. narrowly missed slipping into deflation territory in March, according to official data Tuesday, bringing relief to some economists concerned about falling prices.
The rate of consumer price inflation in the U.K. was steady at 0 percent in March from a year earlier, in line with expectations by analysts polled by Reuters. Sterling fell to a session low of $1.4618 after the data was released.
Falling consumer price growth has been attributed to the lower cost of oil and food imports.
It comes amid concerns about all-out deflationary spiral -- when prices fall and shoppers withhold purchases in the hope of further reductions, hurting the economy.
Howard Archer, chief U.K. and European economist at IHS Global Insight, noted that the March figures could have been affected by an earlier Easter holiday season this year.
"Deflation in March may well have been limited by the fact that Easter occurred right at the start of April this year rather than in the middle as was the case in 2014," Archer said in a note Tuesday. "This resulted in some of the hikes in air/sea transport and holiday prices occurring in March in 2015, whereas all the hikes occurred in April in 2014."