FOR the first time since 1960, the price of British goods and services has fallen over the course of a year—but only just. Prices fell by 0.1% in the year to April 2015, having been unchanged in the year to March. The change is tiny and its cause is not a concern. But a threshold has been breached: Britain is now in deflation.
On the other hand, in a BBC interview, Britain's Chancellor of the Exchequer George Osbourne sought to allay deflation fears: "Negative inflation is not damaging deflation."
Here's an excerpt from a May 19 BBC article titled, "UK inflation turns negative":
Bank of England governor Mark Carney said he expected inflation to remain very low over the next few months.
But Mr Carney added that "over the course of the year, as we get towards the end, inflation should start to pick up towards our 2% target".
The latest inflation figures show that transport costs were 2.8% lower in April than the same time a year ago, while food was 3.0% cheaper...
The latest inflation figure means that a basket of goods and services that cost £100 in April 2014 would have cost £99.90 in April this year.
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