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Economy

UK Consumer Prices Fall for First Time Since 1960

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By Douglas A. McIntyre Published
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Deflation, that ability to buy more goods and services for roughly the same amount, has started to take hold in the United Kingdom and threatens several other large economies. The trend could trigger stagnant wages as companies lose the ability to raise prices, and price increases could also erode, which might drag the United Kingdom back into recession. For April, the country’s Consumer Price Index (CPI) fell 0.1%.

The Office for National Statistics reported:

  • The Consumer Prices Index (CPI) fell by 0.1% in the year to April 2015, compared to no change (0.0%) in the year to March 2015.
  • This is the first time the CPI has fallen over the year since official records began in 1996 and the first time since 1960 based on comparable historic estimates.
  • The largest downward contribution came from transport services — notably air and sea fares, with the timing of Easter this year a likely factor.
  • CPIH (not a National Statistic) grew by 0.2% in the year to April 2015, down from 0.3% in March 2015.

Numbers for the United States are not much better. According to the Bureau of Labor Statistics:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in March on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index declined 0.1 percent before seasonal adjustment

Japan has been in a deflationary period for some time, according to most measurements. Even previously white-hot economies such as Singapore face the same problem. According to the Channel News Agency:

The Republic experienced deflation for the fifth consecutive month in March as the consumer price index (CPI) stayed in negative territory, according to figures released by the Department of Statistics

The U.K. numbers are the latest to show what has become an emerging world economic problem.

ALSO READ: The 10 Most Popular Stores in America

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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