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|Key inflation measure hits zero
||Key inflation measure hits zero
(20 minutes later)
|A key measure of UK inflation has fallen to zero for the first time in 49 years, official figures show.||A key measure of UK inflation has fallen to zero for the first time in 49 years, official figures show.|
The Retail Prices Index (RPI), which includes housing costs, fell to 0% in February from 0.1% in January - the lowest reading since March 1960.
|There are concerns that if prices keep falling, this could lead to a prolonged period of deflation.||There are concerns that if prices keep falling, this could lead to a prolonged period of deflation.|
Meanwhile the Consumer Prices Index (CPI), which is used in economic policy, rose unexpectedly to 3.2%.
The fall in RPI, as seen by the latest Office for National Statistics data, stems largely from the fall in mortgage repayments after a series of interest rate cuts.
The Bank of England uses the index of consumer prices (CPI) to set interest rates.
But the government uses the broader measure of RPI to set the level of state pensions, welfare benefits and index-linked government bonds.