Inflation in Britain has turned negative for the first time in more than half a century, giving a boost to household finances and bolstering expectations that interest rates will remain at a record low for the rest of this year.

The Office for National Statistics said its consumer price index measure of inflation was down 0.1% in April from a year ago. That compared with the inflation rate at zero in February and March.

Statisticians said this was the first time the CPI had fallen since official records began in 1996 and the first time since 1960 based on comparable historic estimates.

The Bank of England had already forecast inflation would turn negative at some point this year but predicted it would soon pick up again. Economists agree there is little reason to fear the UK will fall into outright 1930s-style deflation, which is regarded as a sustained fall in the cost of living, not a temporary decline below zero.

bbabo.Net