Inflation has slipped to a 14-year low of 0.5pc, lower than economists and the markets had expected
The UK economy is in danger of falling into deflation, the Bank of England’s Governor warned on Tuesday as data showed that inflation had fallen to a 14-year low.
Price growth fell to 0.5pc in December, a bigger slump than economists had anticipated. A poll of analysts before the numbers were release predicted that inflation would ease from 1pc to 0.7pc.
Mark Carney, the Governor of the Bank of England, told BBC News: “We will expect it to fall further, and inflation to continue to drift down in the coming months.” In a separate interview, Mr Carney told ITV News that deflation was now "possible".
Inflation has now hit a level only once before recorded by the Office for National Statistics - in May 2000.
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