Inflation falls to 0.3% in January as Britain heads for deflation

Kathryn Hopkins
The Times
BoE governor Mark Carney warned last week that “more likely than not headline inflation would turn negative”
BoE governor Mark Carney warned last week that “more likely than not headline inflation would turn negative”
ANDY RAIN/EPA
Kathryn Hopkins
The Times

Inflation has fallen to its lowest level on record as the Bank of England predicts that Britain is heading for deflation.

New figures from the Office for National Statistics (ONS) showed that the annual rate of consumer prices inflation dropped to 0.3 per cent in January, down from 0.5 per cent in December. This was the lowest level since 1989 when the ONS began collating data in this way.

The ongoing supermarket price war and falling petrol prices were the main drivers behind the lower number. Global oil prices last month fell to their lowest level in almost six years at below $45 a barrel.

David Cameron, the prime minister, jumped on the figures, tweeting that this “means security for hardworking taxpayers & their families”.