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U.K. Inflation Plunges to 0.5%
Inflation in the U.K. slowed to only 0.5% in December, well below the 2% considered healthy by the Bank of England, according to the Office of National Statistics.
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Inflation in the U.K. slowed to only 0.5% in December, well below the 2% considered healthy by the Bank of England, according to the Office of National Statistics.
The sharp decline was due to plunging oil prices. The central bank says the shrinkage could actually stimulate the British economy as along as declining prices don't become more widespread.
A lengthy overall drop in consumer prices could trigger a period of destructive deflation, in which buyers hold off on purchases in anticipation of lower prices in the future. But economists tell BBC that appears unlikely. They say the U.K. gross domestic product should again show strong gains this year.
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