Experts back Chancellor's positive view of negative inflation

Economic experts have backed the Chancellor's upbeat assessment of the latest negative inflation figures and told consumers to enjoy it while it lasts.

Figures released today showed that the UK had fallen into deflation for the first time in more than 50 years but George Osborne insisted this was not "damaging" the economy.

His view was backed by James Sproule, chief economist at the Institute of Directors, who said the benefits outweighed the negatives.

Markit chief economist Chris Williamson said that he didn't think deflaiton would be affecting the UK for long.

"Further weak inflation numbers are to be expected in coming months, but any dip into deflation is likely to be short-lived, and the UK shows few signs of sinking into a Japanese-style deflationary slump.

"The ongoing lack of inflation is a boon for consumers."

His view was echoed by Samuel Tombs of Capital Economics who said the low inflation didn't appear to be having any "malign" economic effects.

"Consumers are undertaking, not delaying, purchases and wage growth is picking up," he noted.

Meanwhile, the CBI sought to quell homeowners concerned about the inflation rate and a possible rise on interest rates.

Newton-Smith's thoughts were backed up by Scotiabank's Alan Clarke, who said: "The emphasis is largely symbolic and it shouldn't have come as a surprise to most people. Nonetheless, it is a low point and for now, it represents an obstruction to a Bank of England rate hike.

"That obstruction should begin to disappear around the end of the year when headline inflation is likely to reaccelerate towards 1% and beyond into 2016."