Prices paid to U.S. producers plunged 2.8 percent in October, the largest decline on record, Bloomberg reported.

The decline, which was larger than forecast, followed a 0.4 percent decrease in September, the Labor Department said. However, when looking solely at core producer prices – those that exclude food and fuel – the Producer Price Index increased slightly by 0.4 percent. This illustrates that declines in raw material costs have yet to have a ripple effect on other prices.

Furthermore, other countries are experiencing similar economic threats such as the United Kingdom, whose government just released a report showing Britain’s inflation rate fell the most in at least 11 years, indicating a rising risk of deflation.

“Fuel prices are falling like a stone and will continue to drop,” said Michael Gregory, a senior economist at BMO Capital Markets in Toronto, whose PPI decline estimate was 2.5 percent. “The drop in consumer spending is going to cause a ripple effect all along the supply chain in disinflationary pressures, if not deflationary pressures.”

This year’s forecast is starkly different than a year ago, when prices paid to U.S. producers rose 5.2 percent, after an 8.7 percent gain in the 12 months ended September. And core producer prices a year ago increased by 4.4 percent, the most since 1989.

“This is as bad as we have seen it in our lifetimes,” said Dow Chemical Co. CEO Andrew Liveris in a Nov. 13 interview. An increase in prices “is probably going to be near impossible in the next three to six months.”