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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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Osborne: 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 tomorrow, 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.

Chancellor George Osborne will address the Royal Economic Society. Credit: Anthony Devlin/PA Wire

"Of course we will always remain vigilant to ensure that inflation is low for the right reasons," Osborne's speech reads.

"Rising real incomes, a recovery spreading to all parts of our economy, and family budgets that can stretch that little bit further - let's celebrate these effects of low inflation, not fear them."

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

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