UK inflation slumps to lowest since 2016 as coronavirus hits

Britain's inflation rate sank to its lowest level since 2016 in April due to the global health crisis.

Official data released Wednesday (May 20) showed consumer price inflation dropped to an annual rate of 0.8%, compared with 1.5% in March.

It marked the sharpest one-month fall in more than a decade, and dragged inflation further below the Bank of England's 2% target.

Britain's Office of National Statistics said a global fall in oil prices and declining energy bills contributed to the inflation rate.

Clothing stores slashing prices was another factor.

The BoE increased its bond-buying program by a record 200 billion pounds in March as the virus crisis escalated.

Many economists expect another increase on June 18th.

Wednesday also saw Britain sell a government bond with a negative yield for the first time.

The sale means the state is effectively rewarded to borrow as investors agree to be repaid slightly less than they lent.

Britain isn't the only country doing this.

Japan and Germany have also sold government debt with a negative yield.

Such moves reflect growing concerns about the prospect of a severe global recession caused by the health crisis and bond-buying by central banks to cope with it.