UK CPI inflation has turned negative for the first time on record, as the recent slump in the oil price continues to put deflationary pressures on the UK economy.
The latest figures published by the Office for National Statistics reveal UK CPI inflation over the year to April fell into negative territory for the first time on record.
In line with economists' forecasts, CPI fell to -0.1%, after two months stuck at the 0% mark following the slump in oil and food prices.
This is the first time CPI has turned negative since official records began in 1996, though some experimental data series show it was last negative over five decades ago, in March 1960.
According to the ONS, the largest downward contribution came from transport services due to a fall in air and sea fares, with the timing of Easter this year cited as a likely factor.
Prices for housing and household services, clothing and footwear, furniture, household equipment and routine maintenance, as well as alcoholic beverages and tobacco, also fell in April.
The slump was also fueled by low oil prices, with Brent currently at around $66 per barrel, as well as the price war raging among the UK's largest supermarkets as they fight for market share.
However, in its quarterly Inflation Report issued last week, the Bank of England has forecast a sharp rise in inflation 'around the turn of the year' as the effect of lower oil and food prices falls out.
Anna Stupnytska, global economist at Fidelity Worldwide Investment, said: "Looking ahead, annual inflation should start accelerating through the year as the base effects from higher oil prices a year ago gradually phase out. However, the strength of the pound will continue to exert downward pressure on inflation for now.
"In addition, with a fiscal drag set to weigh on growth over the next few years, any substantial inflationary pressures are unlikely to resurface any time soon. This means the Bank of England will be in no rush to normalise rates, at least for another year."
The central bank also cut its projection for UK GDP growth for 2015 to 2.5%, from 2.9% in February.
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