The retail prices index fell below zero for the first time in nearly 50 years in March, in a sign of increasing deflationary pressures hitting the economy.

The RPI, a long-standing measure of inflation, slowed to -0.4 per cent during the month, after remaining flat during February, the Office for National Statistics reported yesterday.

The RPI last went negative in 1960, and presages further sharp slowing in prices as unemployment mounts and the gap between consumer demand and supply widens.

Financial Times