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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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ONS: Fuel prices nearly 25p lower than 2012 peak

Lower petrol prices were among the main factors behind the fall in CPI inflation, The Office for National Statistics has said.

The average price of petrol now stands at 116.8p for petrol and 122.9p for diesel - 24.8p below the peak prices seen in April 2012.

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