Video: What is deflation and should we be worried?

Britain has slipped into deflationary territory for the first time in more than 50 years. But what does it mean ans should we be worried about it?

Falling prices generally means people have more money in their pockets to spend and therefore is good news for the economy.

But a prolonged period of falling prices - otherwise known as inflation - can have worrying consquences.

Here's economics editor Ben Chu to explain:

At the moment, deflation isn't causing too much concern as the driver has been the collapse in the oil price and in April falling travel fares around Easter, rather than anything specific to Britain's economy.

A problem could arise, however, if savvy shoppers decide to put off spending believing prices will drop further or employers don't raise wages as much because prices are low, sending the economy into a negative spiral.

But economists are predicting just a brief trip into deflationary territory, which will deliver short term boost rather than be a drain on the economy.

The Bank of England has also said it would be able to intervene with various policy tools to address deflation if it stuck around.