Britain's consumer price inflation dropped to 0.3 per cent year-on-year in January, its lowest recorded level, the government said on Tuesday.
Falling prices of oil and food were the main contributors to the slowdown in growth of the consumer price index from 0.5 per cent in December, the Office for National Statistics said.
Chancellor George Osborne said the record-low inflation was "a milestone for the British economy." "It's great news for families, whose budgets will stretch even further," Osborne said. "It shows that those who went around predicting a cost of living crisis were plain wrong." He said the government would "remain vigilant to all risks, particularly when the global economic situation is so uncertain." Mark Carney, governor of the Bank of England, warned last week that inflation was likely to continue to fall and "potentially turn negative in the spring, and be close to zero for the remainder of the year." The producer price index, which tracks wholesale prices, fell 1.8 per cent year-on-year in January 2015, another record, after dropping 1.1 per cent in December, dpa reported.
The fall in factory-gate prices was spurred by a 50-percent year-on-year drop in crude oil prices in January, the largest fall seen since the government began its current crude oil index in 1997.
But house prices continued to rise sharply at 9.8 per cent year-on-year in December, down marginally from 9.9 per cent in November, the office said.