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Beecroft: You should be concerned about UK deflation and here's why

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The UK is in deflation for the first time in more than half a century. Chairman of Saxo Capital Markets, Nick Beecroft, says the negative message was reinforced by the core inflation figure which disappointed at 0.8%. He says this proves that it's about more than just falling energy prices and food. He says the Bank of England should be cautiously concerned about it.

Beecroft confirms that the UK is unlikely to see an interest rate rise anytime soon with mid 2016 expected to be the earliest.

The pound fell around 0.7% against the dollar after the data was released. Nick expects cable to fall lower with 1.40 possible within the next few weeks.

Sterling was up against the Euro but that was partly down to the ECB's announcement that it will increase the pace of its bond buying programme ahead of the summer. Nick believes GBP will continue to outperform EUR.