UK inflation rate falls to 0%

[TJC1]

http://www.bbc.co.uk/news/business-33518710

 

Howard Archer, chief UK economist at Global Insight, said the latest figure was good news for consumers.

 

"With earnings growth currently seeing clear improvement and employment high and rising, purchasing power is currently in rude heath," he added.

While flat or low inflation can be good news for consumers, a prolonged period of negative inflation is generally perceived as harmful to an economy. The fear is that people will defer spending in the hope that goods or services will become cheaper later.

The current inflation figure is well below the Bank of England's target of around 2%.

 

---------- Post added 14-07-2015 at 12:58 ----------

 

Chris Williamson, chief UK economist at Markit said

 

"The data therefore raise questions over the whether underlying price pressures are really picking up to the extent than the Bank of England is anticipating"

 

"The Bank of England needs to determine whether pay growth will continue to accelerate as firms compete for staff, or whether low inflation will keep the overall rate of increase below levels that would normally worry the monetary policy committee into hiking interest rates,"

 

---------- Post added 14-07-2015 at 13:00 ----------

 

any economists in the house??? it looks like 0% is quite good and negative inflation is bad?

[truman]

Negative inflation (deflation) is bad because if people know or think prices will fall then they'll put off buying stuff so the economy will slow down..(this applies to both consumers and business)

Edited July 14, 2015 by truman

[chem1st]

Deflation is here to stay, and interest rates about to rise.

 

You can say bye bye to HPI as the magic money disappears.

[geared]

Hasn't inflation lowered because the oil price has tanked recently, and since everything is connected to the price of oil in some way it's made things abit cheaper.