U.K. Flirts With Deflation as Prices Fall in April

19-May (Wall Street Journal) — Consumer prices in the U.K. fell on the year for the first time in more than half a century in April, but Bank of England officials say they expect the threat of deflation in Europe’s third-largest economy to soon pass.

Britain’s consumer-prices index, which tracks prices for everything from food and clothing to electrical goods and banking services, fell by 0.1% in the year to April after staying flat in March, the U.K.’s official statistics agency said Tuesday.

The Office for National Statistics said that it estimates that April’s decline was the first time consumer prices have fallen year-over-year since 1960. In the past six months, sluggish global growth and sharp falls in prices for oil and food have dragged down inflation rates across the world.

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PG View: Of course the BoE sees the deflation risks as transitory. If they prove not to be, all they have to do is spool up the printing press again.