Britain slips into deflation in nearly 50 years
UK has slipped into deflation for the first time in nearly 50 years, as the country's RPI saw a negative growth of 0.4% in March.Global icons crash | Top 10 US bank failures
By Agencies |
LONDON: The UK has slipped into deflation for the first time in nearly 50 years, as the country's Retail Price Index saw a negative growth of 0.4 per cent in March.
The British economy reeling under the financial turmoil had seen a RPI of zero in February.
"RPI inflation slowed to -0.4 per cent in March, that is a fall of 0.4 per cent on the year, compared with 0.0 per cent in February," UK Office for National Statistics said in a statement today.
The RPI has fallen into the negative territory for the first time since 1960. Deflation is broadly defined as general fall in prices due to slackening demand.
According to the statement, there was a large downward pressure from housing with the main effects coming from house depreciation, mortgage interest payments and, to a lesser extent, buildings insurance.
With the Bank of England bringing down the rates in recent months to boost the nation's economy, the mortgage interest payments have also fallen.
In March, the Consumer Price Index (CPI) annual inflation - the government's target measure - dropped to 2.9 per cent against 3.2 per cent in February.
The statement noted that largest downward pressure on the CPI came from housing and household services. The UK economy is already in recession amid the financial crisis.
The British economy reeling under the financial turmoil had seen a RPI of zero in February.
"RPI inflation slowed to -0.4 per cent in March, that is a fall of 0.4 per cent on the year, compared with 0.0 per cent in February," UK Office for National Statistics said in a statement today.
The RPI has fallen into the negative territory for the first time since 1960. Deflation is broadly defined as general fall in prices due to slackening demand.
According to the statement, there was a large downward pressure from housing with the main effects coming from house depreciation, mortgage interest payments and, to a lesser extent, buildings insurance.
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With the Bank of England bringing down the rates in recent months to boost the nation's economy, the mortgage interest payments have also fallen.
In March, the Consumer Price Index (CPI) annual inflation - the government's target measure - dropped to 2.9 per cent against 3.2 per cent in February.
The statement noted that largest downward pressure on the CPI came from housing and household services. The UK economy is already in recession amid the financial crisis.
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