The falling cost of travel pushed consumer prices into the red zone, keeping Britain in deflation for the second month in a row. It is the first time Britain has been in deflation for two straight months since 1996.
Consumer prices were also pushed down by cheaper alcohol, tobacco, food and reduced university tuition fees. Core inflation, a better measurement of economic activity however rose from 1% to 1.1%.
The British economy was pushed into no-flation, then recession as a result of low oil and commodity prices and a stronger Pound Sterling.
However, the Bank of England’s latest quarterly Inflation report predicts that if policy makers wait until the first half of 2017 to raise interest rates, inflation will overshoot the 2% target.
Britain also saw its fastest rise in house prices since March. According to ONS, house prices rose by 6.1% in October.
Britain’s Economy Remains In Deflation
