OECD tracks inflation rates

Inflation rates are comparatively higher in Britain than in other developed countries, the Organisation for Economic Co-operation and Development (OECD) has said.

Analysis of various consumer price indices for May have shown the UK near the top of the pile, as other economies slide closer to deflation conditions.

The OECD pointed out that, in the US and Japan, annual price trends stand at -1.3 and -1.1 per cent respectively.

Meanwhile in Germany, Europe’s largest economy, consumer prices have stayed static over the year.

In Britain, the index stood at 2.2 per cent - above the Bank of England’s own two per cent target for the 20th month in a row.

Prices have been depressed over recent months by the continuing effects of the financial crisis and global economic downturn.

Deflation conditions have the potential to greatly increase the depth and duration of recessions, due in part to the fact that it encourages businesses and consumers to hold off on spending in the hope they can get the same goods cheaper, later.ADNFCR-2318-ID-19245300-ADNFCR