By Jonathan Davies

The UK fell into deflation for the first time since records began in 1996 and comparable records since 1960, according the Office for National Statistics (ONS).

Inflation, as measured by the Consumer Prices Index (CPI), fell 0.1% in April, having been at zero for two months.

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The ONS said the biggest downward pressure on inflation was air and sea transport services. The timing of Easter weekend is likely to have been a contributed factor.

Chancellor George Osborne said: "We should not mistake this for damaging deflation.

"Of course, we have to remain vigilant to deflationary risks and our system is well equipped to deal with them should they arise."

Jeremy Cook, chief economist at the international payments company, World First, said: This is not a great surprise and also not a catastrophe for the economy in the longer term. Sterling is around 5.8% stronger than this time last year and the past 12 months have obviously been a significant decline in oil and food prices. The subsequent effect on imports into the UK means that disinflation is piggybacking on every product that we bring in from abroad.”

Is deflation good or bad?

The UK's official inflation target is 2%. But the governor of the Bank of England Mark Carney has said that any deflationary period is likely to be short-term and should be considered a serious problem.

James Sproule, Chief Economist at the Institute of Directors, supported the idea. He said: “The slip into deflation should not worry us, as it is primarily caused by a drop in the cost of energy, which is good news for households and businesses. Falling prices in necessities, such as food and transport, along with a period of sustained job creation and wage growth mean demand and consumption will remain buoyant."

But is it deflation a good thing or a bad thing?

The short answer is both. Generally, deflation is good for consumers but bad for businesses and the economy. Falling prices means more money in the pockets of the general public. Things like your bills and supermarket shops should come down slightly.

Theoretically, you'd think that that means consumers have more money to spend in the shops, which is good for business and the economy.

However, deflation actually discourages purchases. If it is expected to continue or deepen in the coming months, people become aware that products will be even cheaper in a few months.

So why buy that £500 TV now, when it will be cheaper a couple of months down the line?

That lack of immediacy obviously affects sales for retailers, which of course has a knock on effect to the economy.