Inflation falls to 0%: what does it mean for the UK economy?


With average earnings growing by just under 2%, living standards should rise and interest rates should remain low but it’s not all good news

Britain is within a month of a period of deflation. When the figures for March come out next month lower energy bills mean that the cost of living will be lower than it was a year earlier.

These are uncharted waters for the UK, at least in the modern era. There have been times when inflation has turned negative but they have been few and far between since the second world war, and there have been none since the move to the consumer prices index as the preferred yardstick.

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