Thanks to the 2005 RVLR amendment on 23rd October of that year it finally became legal to have a flashing light on a pedal cycle, provided it flashes between 60 and 240 times per minute (1 – 4Hz). Even better: it became possible for a flashing light to be approved, meaning no other light would be needed in that position. And since BS6102/3 does not cater for flashing, approval is granted simply on the basis of brightness (as specified above). But because DfT very much prefer things to be evaluated against a proper technical standard wherever possible: any flashing lamp that is also capable of emitting a steady light is approved only if it conforms with BS6102/3 when switched to steady mode. Since most flashing lights do also have a steady mode, they're legal but not approved, so you'll probably need another lamp that is.
TL:DR? Flashing lights are OK, but may not be fully legal due to a technicallity, which means few lights really are.
Things changed a while back, but aren't always as simple as they might be...
Direct.gov.uk has a good page on the HighWay Code for cyclists, which gives where the light rules come from, but I found the page from CTC to be much more informative.
TL:DR? Flashing lights are OK, but may not be fully legal due to a technicallity, which means few lights really are.