The economists quoted on the BBC News site seem to think it’s good.
Ian Stewart, chief economist at Deloitte, said the fall was “likely to prove short-lived and positive for growth”.
“Falling prices raise consumer spending power and help keep interest rates low. This looks like the mild and benign variety of deflation, which is good news for consumers and for growth,” he said.
Andrew Sentance, senior economic adviser at PricewaterhouseCoopers and a former member of the Bank of England’s Monetary Policy Committee, said he did not expect the fall in prices to be sustained.
“Once the impact of the big drop in oil prices drops out of the annual inflation rate, it will move back up to 1-2% over the next year or so. With wage inflation picking up, we may soon be considering the prospect of above-target inflation,” he said.
“In the meantime, flat or slightly falling consumer prices are good for growth, boosting real consumer spending power. So a temporary period of slightly negative inflation can be good for the UK economy.”