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Inflation rate dips below zero

By Wesleyan

The UK economy was in deflation for the first time in 55 years last month, official figures reveal.

The Office for National Statistics (ONS) reports that the Consumer Price Index (CPI) of inflation was minus 0.1 per cent, compared to zero per cent in February and March.

According to the ONS the last time inflation turned negative was when the UK's Prime Minister was Harold Macmillan, in March 1960.

The Bank of England predicted that inflation would be minus 0.1 per cent in its Inflation Report for the quarter last week. Its policymakers expect rising oil and food prices to push up inflation again before the end of 2015.

When alcohol, energy, food and tobacco prices are taken away from the inflation figure it was 0.8 per cent last month. This core inflation figure is at its lowest for four years.

The annual fall in food prices in April was 3 per cent and it has been this way since the start of the year. The price of petrol rose 2p a litre on average between March and April and the other measure of inflation, the Retail Price Index (RPI) was 0.9 per cent. This includes the cost of housing.

Copyright Press Association 2015

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