Britain falls back into deflation

London, Oct 13 (IANS) Britain has fallen back into deflation as consumer prices were pushed into negative territory for the first time since April, the media reported on Tuesday.

Inflation came in at -0.1 percent in September, matching the lowest level seen in the British economy since 1960. Economists had expected prices to remain unchanged at zero percent, The Telegraph reported.

Unexpectedly weak rises in the price of clothes and falling petrol prices were to blame for September’s numbers, said the Office for National Statistics.

Clothing and footwear prices rose by 2.8 percent between August and September this year compared with a rise of 4.0 percent during the same period last year.

Food prices rose last month by 0.02 percent.

The introduction of a price cut from British Gas also affected last month’s figures. Gas prices fell by 2.1 percent compared with no change between the same two months a year ago, the office added.

Chancellor George Osborne said Britain was not entering a period of “damaging deflation” and that falling prices would be a boon to people’s pay packets.

“We remain vigilant and our system is designed to deal with such risks,” he tweeted.

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