UK tumbles into deflation

Times: The United Kingdom edged into deflation last month as the RPI (Retail Price Index) measure of inflation tumbled to -0.4 per cent from 0 per cent in February, official figures showed this morning. This is the first time that RPI inflation, which includes housing costs and is used as a benchmark for UK wage deals, has turned negative since 1960.

CPI (Consumer Price Index) inflation, the Bank of England's target rate, also fell from 3.2 per cent to a one year low of 2.9 per cent is tipped to decline further in the coming months. The Bank of England has forecast that CPI inflation will drop close to zero and stay there until 2011.


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