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Osborne: Let's celebrate effects of low inflation not fear them

Britain could experience negative inflation over the coming months without any significant risk to the economy, the Chancellor is expected to say.

In a speech to the Royal Economic Society, George Osborne will say the slump in the headline rate to just 0.5% is due to external factors - and that the benefits for consumers should be celebrated.

Bank of England Governor Mark Carney told ITV News that deflation in the UK is "possible," but is a risk that can be managed,

He was speaking after inflation fell to just 0.5%,which was welcomed by David Cameron as "fundamentally good news" for household budgets.

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Carney: Deflation 'possible' but risk can be managed

Deflation in the UK is "possible" but a risk that can be managed, Mark Carney has told ITV News.

Bank of England governor Mark Carney said the fall in inflation is good news for British households in the short term but said it was their responsibility to ensure the price falls didn't become more generalised.

"The good news is that we have the means and the will and the responsibility to get inflation back up over the medium term within two years lets say to that 2% inflation target and we will do that," he said.

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Osborne: Let's celebrate effects of low inflation not fear them

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