For the first time since official records began, inflation is now at 0%.
The Office for National Statistics (ONS) has announced that the Consumer Prices Index (CPI) rate for inflation fell again last month from 0.3% to 0%.
Whilst most financial experts had predicted the rate would fall further from January to February. Most anticipated just a 0.1% move, but ongoing supermarket price wars and lower fuel prices saw a deeper drop.
Fuel prices have dropped significantly over the past year, falling by 16% and this has had a knock-on effect with other items in the basket of goods used to calculate inflation with manufacturing and transportation.
In addition, food prices are 3.4% lower than they were 12 months ago.
Whilst 0% inflation (and deflation) is good for households as their pound goes further and they are tempted to spend, it could have a detrimental effect on the economy if it continues for too long as many individuals and companies delay making purchases because they are waiting for prices to fall even further, thus stalling the economy.
Also, wages have fallen significantly from 2008 to 2014 and have only just started to outpace inflation whilst it has been at such a low rate. Data from the ONS shows that the current wage growth is now 1.8%.
The ONS started to document the CPI rates in 1989 and at no point since then has it been as low as 0%, unofficial records pinpoint as early as 1960 since the last time inflation stood at 0%.
Deflation could also make the Bank of England finally change the interest rate. However, they are unlikely to put it up which would please savers, but decrease it further to 0.25%, although it is thought the 9 member Monetary Policy Committee are very divided about whether to keep the rate at its record low of 0.5% or to increase or decrease it.