From late 2015, the rate had begun to increase gradually from close to zero.
Falls in air fares and prices for clothing, vehicles and social housing rent were the main contributors to the decrease.
However downward pressures were partially offset by rising prices for motor fuels and for certain recreational goods and cultural services, and by food prices, which were unchanged between March and April 2016.
Andrew Wilson, Head of Investment at Towry, said:
“This fall was largely unexpected, although sterling has barely softened so far, as perhaps nothing really changes for the longer term outlook for interest rates. That is, the market can barely see when there might be another rise, and at the moment is plumping for 2018. Core inflation was also down, from 1.5% to 1.3%, and this might further feed the narrative that the UK economy is materially slowing down, and largely due to uncertainties around potential 'Brexit'.
“In reality the economic slowdown is global in nature, and of significant concern to investors. However, for now it still appears that the second half of the year can prove to be stronger, and so we will stay on 'recession watch' but without yet taking evasive action. Investors’ ability to adapt and be opportunistic will be crucial for the rest of the year, as both the Referendum and the Presidential election are liable to generate excess volatility, and market over-reaction, in both directions.”
