Annual consumer price inflation in the U.K. dropped below zero
for the first time since the 1960s. The Bank of England had predicted the inflation would fall, however, it also said it should pick up soon. Meanwhile, the local currency was lower.
The Office for National Statistics (ONS) revealed the headline CPI figure of -0.1%, and added that lower travel costs, because Easter fell earlier this
year, had pushed prices down, CNBC says.
Source: The Guardian
April marked the first time the consumer price index
(CPI) was negative since official records began in 1996, and based on
comparable estimates going back further, it was the first time the data
showed deflation since 1960.
The ONS said the main downward effect on price changes in April came from air fares and ferry tickets - allegedly due to the earlier timing of the Easter holidays this year, as transport prices rose by much less this April compared with a year ago. Motor fuels, which rose this April but fell between March and April in 2014, gave the biggest upward effect.
Negative inflation had already been predicted by the Bank of England. However, it also had said it would soon pick up again. Economists agree there is little reason to be afraid that the UK will fall into outright deflation, which is regarded as a sustained fall in the cost of living.
Sterling slipped after the release to trade at about $1.5535, down from $1.5566 just before the data.
