According to The Telegraph, `Britain is now deeply in deflationary territory`; inflation has seen its biggest drop since records began in 1948.

In particular, RPI (Retail Prices Index) annual inflation stood at minus 1.6% in June.

A debt expert for Think Money commented: “Although some people may welcome falling prices, it is important to be aware of the implications.

“On a national level, deflation is bad for the economy. When people know that prices are dropping, they`re always tempted to put off spending money until `tomorrow`. This means businesses make less money, and that`s clearly bad for their employees.

“Plus, at a time like now, some people may suffer because their annual pay rise is based on RPI. For people with debts that are continuing to grow, it may become increasingly difficult to stay on top of their finances. We would advise anyone in this situation to contact a professional debt adviser without delay.”