UK inflation turns negative for first time since 1960

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
UK inflation turns negative for first time since 1960

Inflation in the UK has turned negative for the year to April for the first time since 1960, according to data released this morning.

The Office for National Statistics (ONS) said the consumer prices index measure of inflation fell by 0.1 per cent in the year to April, compared to its 0 per cent move in the year to March.

“This is the first time the CPI has fallen over the year since official records began in 1996 and the first time since 1960 based on comparable historic estimates,” the ONS said.

The body said the largest downward contribution came from transport services - notably air and sea fares, with the timing of Easter this year a likely factor.

The retail prices index, however, rose 0.9 per cent.

CPIH, which includes housing costs but which is not deemed a national statistic, grew by 0.2 per cent in the year to April, down from 0.3 per cent in March.

The Bank of England governor Mark Carney said last week during the release of the Inflation Report that “while it could turn negative”, inflation was “expected to pick up notably by the end of the year”.

The governor later elaborated on this by adding: “As we get to the end of the year, inflation will be above 1 per cent” and would return to the 2 per cent target “within two years”.

BNP Paribas told the FT earlier today that a dip into negative territory for UK inflation would be “psychologically significant”.

It noted UK inflation had “never turned negative even at the height of the global recession in 2008-2009”.