Head of Research Ben Southwood’s comments on the latest CPI figures feature in Newsweek.
This is the first time the UK has entered deflation since official records began in 1996 and the first time since 1960 based on historic estimates.
However, Ben Southwood, head of research at the Adam Smith Institute, said the negative figures should be embraced by consumers.
“We have deflation – albeit extremely mild deflation – for the first time since the 1960s. But this seems to be ‘good deflation’, coming mainly from cheaper goods – especially cheaper oil – rather than a drop in consumer demand,” he said.
Southwood added that the Bank of England, which has set a target of 2% inflation, should remain vigilant against bad deflation.