Bank Of England governor Mark Carney and Chancellor George Osborne are insisting that Britain's economy can manage if inflation, which recently fell to a 15-year low, dips into the negative territory of "deflation".
Central bankers are on edge about a 'downward spiral', which saw Japan experience an economic "lost decade", as the European Central Bank battles to save the ailing eurozone economy after it slid into deflation.
Inflation in Britain surprised many by sinking to 0.5%, spurred by low oil prices and the supermarket price war, with Osborne saying it should be viewed as "welcome news for Britain's households".
Deflation marks an actual fall in prices, rather than just the rate of inflation slowing, which is known as disinflation.
So you may think prices falling lower and lower can only be good news for your wallet, but here are five very important reasons to worry if it goes on for too long.
How Deflation Can Be Harmful In 5 Steps
If prices keep falling, why buy now? (01 of05)
Open Image ModalBut if fewer people buy stuff, firms make less...(02 of05)
Open Image ModalIf wages continue to rise while inflation falls, the inflation-adjusted cost of labour ends up weighing heavily on businesses' balance sheets.
With less income as well from people spending, firms could be forced to compensate by cutting wages and even staff. (credit:Alex_Schmidt via Getty Images)
And with less money, things will need to be even cheaper(03 of05)
Open Image ModalWith more people making less money at work, or losing their jobs outright, facing wage cuts, or losing their jobs outright, businesses will have to cut their prices even further to still appeal to customers and try to survive... (credit:Owen Humphreys/PA Archive)
Meanwhile, your debt is still there...(04 of05)
Open Image ModalYou may have less money, but your debt still needs to be paid off, so you might have to cut back on spending even more to get your finances under control.
Deflation raises the inflation-adjusted value of debts, making them even harder to pay off, as you are paying it off with pounds that are effectively worth less in economic value. (credit:Anthony Rosenberg via Getty Images)
And it can just get worse and worse... (05 of05)
Open Image ModalWith plummeting prices forcing firms to sack people to survive, while others end up closing down, wages end up suffering and prices fall still further in a dangerous deflation spiral. (credit:Charles Bowman via Getty Images)