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Great Britain Slips Back into Price Deflation

Lower energy costs has helped ease Britain's consumer price index back into negative territory. Retail discounts were also contributors.

In September, the nation's CPI was at its lowest level since April.

Despite some growth and inflation in the first half of the year there are signs the recovery is losing its impetus.

Some economists fear the slowdown in the Chinese economy could seriously damage the European and US economy. (BBC, September 30)

But a high-ranking British official says he sees an upside to falling prices. Read this article excerpt (The Telegraph, October 13):

Inflation came in at -0.1pc in September, matching the lowest level seen in the UK economy since 1960. Economists had expected prices to remain unchanged at 0pc.

Aggressive clothing discounts and falling petrol prices, were to blame for September's numbers, said the Office for National Statistics. ...

The introduction of a price cut from British Gas also took effect in last month's figures. Gas prices fell by 2.1pc compared with no change between the same two months a year ago ...

Britain has been skirting with "noflation" since the start of the year, with CPI hitting 0pc four times over the last nine months. Average inflation in 2015 is set to register at 0pc, one of the lowest years of consumer price rises in the post-war era, according to analysts at Barclays.

Chancellor George Osborne said Britain was not entering a period of "damaging deflation" and that falling prices would be a boon to people's pay packets.

You can read the entire article by following the link below:

http://www.telegraph.co.uk/finance/economics/11928178/Britain-falls-back-into-deflation-as-tumbling-fuel-prices-take-effect.html