UK inflation dips into negative
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Inflation dipped below 0% for the first time since records began in April, down to -0.1%, according to the lates figures from the Office for National Statistics (ONS).
The Consumer Prices Index has never turned negative in the decades since it was first recorded in 1960. The ONS said the biggest individual factors driving the CPI movement were dropping air and sea travel prices.
Chancellor of the Exchequer, George Osborne, said in a statement: “We should not mistake this for damaging deflation. Of course, we have to remain vigilant to deflationary risks and our system is well equipped to deal with them should they arise.”
He added that the news should in some ways be welcome, since, combined with the lower oil price means lower costs for household budgets whilst wages begin to rise after many years of stagnation.
The Bank of England had previously predicted that a period of negative inflation (or deflation), would materialise at some point in 2015. It is thought that it will be a temporary scenario, however.
