Britain’s annual retail price inflation rate fell 0.4 per cent in March, turning negative for the first time in nearly 50 years due to falling home loan payments, official data showed on Tuesday. The Retail Prices Index( RPI ) inflation rate, which includes the cost of home loans, sank last month after a flat reading in February, the Office for National Statistics revealed in a statement. ‘For the first time since March 1960, annual inflation measured by the RPI, which includes housing costs such as mortgageinterest payments and council tax, fell below zero,” the ONS said.
The Bank Of England has slashed interset rates six times since October, to the current record-low of 0.5 per cent, as it seeks to lift the country out of recession. “The most eye-catching data saw headline retail prices fall 0.4 per cent year-on-year in March, thereby moving into negative territory for the firt time in 49 years as it was dragged down by sharply reduced mortgage interest rates,” IHS Global Insight economist, Mr Howard Archer noted. Meanwhile, the 12-month consumer price inflation slowed to 2.9 per cent in March owing to sliding domestic gas, housing and transport costs.