Open

Coming up

Don't miss

Replay


LATEST SHOWS

THE WORLD THIS WEEK

The World This Week - 01 August 2014 (part 2)

Read more

MEDIAWATCH

Coverage of Gaza in the Israeli media

Read more

REPORTERS

1914-1918: The Depths of Hell

Read more

THE WORLD THIS WEEK

The World This Week - 01 August 2014

Read more

THE INTERVIEW

Exclusive: Israel's US ambassador speaks to FRANCE 24

Read more

#THE 51%

World War One: The war that changed women’s lives

Read more

FRANCE IN FOCUS

Ségolène Royal goes for green

Read more

THE OBSERVERS

A look back at some of the Observers' best stories

Read more

DEBATE

Argentina Defaults: Kirchner Cries Foul Over 'Vulture Funds' (part 2)

Read more

  • Israeli soldier feared captured, ceasefire 'over'

    Read more

  • Exclusive: Israel's US ambassador speaks to FRANCE 24

    Read more

  • Air France ground workers to strike on August 2

    Read more

  • Rogue general denies Islamist seizure of Benghazi

    Read more

  • Ugandan court strikes down anti-gay legislation

    Read more

  • 1914-1918: The Depths of Hell

    Read more

  • Regional summit to tackle deadly Ebola outbreak

    Read more

  • French hospital to open wine bar for terminally ill patients

    Read more

  • Video: Tipping is dying out in French café culture

    Read more

  • €2.5 million in cocaine ‘disappears’ from Paris police HQ

    Read more

  • Appeal court keeps French rogue trader Kerviel in jail

    Read more

  • Interactive: France’s new plan to counter jihadism in Africa

    Read more

  • Ukrainian army suffers losses in separatist attack

    Read more

  • Argentinian markets plummet following default

    Read more

  • French Jews speak of growing fear in Paris amid Gaza conflict

    Read more

Business

Inflation turns negative for first time in fifty years

Latest update : 2009-04-21

Britain's Retail Prices Index (RPI) inflation rate fell in March by 0.4%. For the first time since March 1960 annual inflation, including house prices, fell bellow zero, according to the Office for National Statistics.

AFP - Britain's annual retail price inflation rate fell 0.4 percent in March, turning negative for the first time in nearly 50 years due to falling home loan payments, official data showed Tuesday.
  
The Retail Prices Index (RPI) inflation rate, which includes the cost of home loans, sank last month after a flat reading in February, the Office for National Statistics revealed in a statement.
  
"For the first time since March 1960, annual inflation measured by the RPI, which includes housing costs such as mortgage interest payments and council tax, fell below zero," the ONS said.
  
The Bank of England has slashed British interest rates six times since October, to the current record-low of 0.5 percent, as it seeks to lift the country out of recession.
  
"The most eye catching data saw headline retail prices fall 0.4 percent year-on-year in March, thereby moving into negative territory for the first time in 49 years as it was dragged down by sharply reduced mortgage interest rates," IHS Global Insight economist Howard Archer noted.
  
Meanwhile, British 12-month consumer price inflation slowed to 2.9 percent in March owing to sliding domestic gas, housing and transport costs.
  
That was the lowest CPI level since March 2008 and compared with a reading of 3.2 percent in February.
  
"The largest downward effect on the CPI came from housing and household services. This was mainly due to a fall in gas bills while they were unchanged a year ago," the ONS added.
  
Tuesday's news sparked fears of deflation -- or a prolonged period of falling prices -- could be adding to the problems of recession-hit Britain.
  
"The ongoing relative stickiness of consumer price inflation suggests that it is unlikely to turn sharply negative later this year although a brief period of mild deflation is still possible," Archer said.
  
"However, the year-on-year decline in retail prices will undoubtedly deepen significantly further as lower mortgage rates impact."
  
Tuesday's inflation data was published one day before the British government was due to deliver its annual budget outlining taxation and spending plans for the 2009/2010 financial year.

Date created : 2009-04-21

COMMENT(S)