UK inflation rate drops to zero in June, giving British households a boost

Economic Indicators Associated Press

The U.K. inflation rate dropped to zero in the year ending in June, offering a boost to consumers at a time of when household wages are growing.

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The Office of National Statistics says Tuesday that the rate fell slightly — compared to 0.1 percent in the year to May — amid falls in in food and clothing prices, and rises in air fares last year.

While low inflation is good in the short term, experts worry about the trend lasting too long. A downward price spiral hurts the economy, as people defer spending — particularly on larger items — hoping that it will become cheaper later.

The Bank of England has predicted inflation will pick up at the end of the year. The target is 2 percent.