Negative inflation for first time in 55 years
THE rate of inflation was negative for the first time in more than half a century last month.
The Consumer Price Index (CPI) measure of inflation dipped to minus 0.1 per cent.
Chancellor George Osborne said the figure was “good news for family budgets”.
But the TUC said the figure from the Office for National Statistics could signal there is something wrong with the recovery.
It is the first time CPI inflation has turned negative since 1960, based on comparable estimates.
Osborne said: “Today we see good news for family budgets with prices lower than they were a year ago.
“As the governor of the Bank of England said only last week, we should not mistake this for damaging deflation.”
Inflation has been dragged lower by the supermarket price war and falling oil prices.
But yesterday’s figures showed “core” inflation, excluding the effects of energy, food, alcohol and tobacco, was also subdued.
At 0.8 per cent in April, it was at its lowest level since March 2001.
TUC general secretary Frances O’Grady said: “The first period of negative inflation in over half a century could signal there’s something very wrong.
“With the threat of deflation set to continue, the Chancellor’s plans for extreme cuts risk putting the economy into serious trouble.”