We have measured the phase shift predicted by Aharonov and Casher (AC) for a magnetic dipole diffracting around a charged electrode for the case of thermal neutrons, using a neutron interferometer containing a 30‐kV/mm vacuum electrode system. Tilting the interferometer about the incident beam direction introduces a spin‐independent gravitationally‐induced phase shift which enables unpolarized neutrons to be used. A supplementary magnetic bias field of the correct magnitude allows first‐order sensitivity to the AC phase shift to be achieved. Nevertheless, the theoretically predicted phase shift is only 1.52 mrad for the geometry and conditions of the experiment. We observe a phase shift of 2.11±0.34 mrad. A detailed description of the experiment and its interpretation is given in this paper.

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