Yes. Today’s figures mean a basket of goods worth £100 a year ago now costs £99.90. Low inflation has been driven by falling petrol and grocery prices.
What are the disadvantages?
If prices continue to fall, shoppers could be put off purchases and firms could delay investment. Meanwhile, mortgages could become less affordable, especially if wages drop. But with low oil prices likely to fade, such a scenario is unlikely.
How will this affect interest rates?
A low consumer prices index should mean rates at 0.5 per cent for longer. If negative inflation continues, there is a possibility that interest rates could be cut even further.
How long will this period of deflation last?
A rebound in oil prices and the stability of global food prices mean it is likely to be short-lived. Analysts predict that inflation will pick up towards the end of the year.