For the first time since 1960, Britain has fallen
into deflation. Modelled data
produced by the Office for National Statistics (ONS) suggest it is also
the lowest rate since 1960.
Economists had predicted inflation would remain at zero in April.
However, most said negative inflation in the UK was likely to be
short-lived.
The biggest drag on
inflation last month was a 3pc fall in food prices and cheaper diesel
and petrol costs, which fell by 12.3pc in the year to April, even though
prices have bounced back over the past few months. The ONS said these two components alone dragged down the headline rate by 0.7 percentage points.
The timing of the Easter holiday - which pushed up travel costs in last
year's calculation - but did not affect this year’s data - also dragged
the headline rate down by 0.1 percentage points, according to the ONS.
"Price changes for these fares between March and April vary notably year
on year, with the timing of Easter a likely factor," it said.
The Bank of England forecast that Britain would dip into deflation in April, but Governor Mark Carney
has consistently said that any period of negative inflation is likely
to be temporary, and will not morph into the pernicious deflation seen
in countries such as Japan.
He stressed last week that inflation was likely to climb “above 1pc” by the end of this year
.jpg)
