In February in the UK, the inflation rate fell to 0% from 0.3% the month before. Lower costs for food and computer goods are responsible for the decline. February’s rate is the lowest seen since the Consumer Price Index estimates began in 1988. “It looks likely the rate will drop below zero at some point in the coming months, and hover around zero for most of the year,” predicted senior economist Ben Brettell at Hargreaves Lansdown.
Many economists predict that the drop in the inflation rate will have positive effects on the UK’s economy as long as it does not presist in the long term. “Together with higher earnings, lower inflation is boosting people’s spending power, and will contribute to economic growth in the year ahead,” said British Chambers of Commerce David Kern.