That is an increase from the 0.4 per cent recorded in February, while the consumer prices index including housing costs (CPIH) increased from 0.7 per cent to one per cent over the same period.
Fuel costs was a factor in the rising inflation figure, with the ONS noting that the price of a litre of petrol stood at 123.7p in March, compared with 119.4p a year ago, and a recent low of just 106.2p per litre last May.
Clothing costs also jumped, off the back of increased discounting in February, according to the ONS.
Despite the level of discounting dropping back in March, it noted that the overall levels of clothing discounts on offer are unseasonably high at the moment.
Inflation rising appears to be the greatest economic concern at the moment with several industry representatives highlighting the risks.
They have repeated Roma Finance managing director Scott Marshall who earlier this month said: “Inflation is the biggest risk and it’s the one we have most conversations about.”
Rising confidence leading to more spending
Rachel Winter, associate investment director at Killik & Co, said that spending is rising on the back of the confidence provided by the success of the vaccine programme and the gradual unlocking of the economy, and suggested this may continue further as the weather improves.
She continued: “Many non-essential retail stores were greeted with huge queues when they reopened their doors on 12 April. Given that UK households will have amassed an estimated £250bn in savings over the lockdown, consumer spending could play a significant role in restarting the economy.”
Winter also pointed to increases in road traffic and job listings as “encouraging indicators” of the improving health of the economy.
Risk of inflation jump
Kevin Brown, spokesman at Scottish Friendly, suggested easing of lockdown was always likely to lead to a rise in inflation, but argued the spike was not as high as some may have expected.
But he added that as the final restrictions were lifted, inflation could be pushed well beyond the Bank of England’s two per cent target.
This was echoed by Adrian Lowcock, head of personal investing at Willis Owen. He concluded: “While inflation may experience a short term spike this year we believe longer term higher inflation poses a significant risk for investors.”