By Jonathan Davies

The rate of inflation in the UK has fallen to 0.3%, the lowest figure on record.

The Office for National Statistics (ONS) said the falling price of fuel was the biggest factor in January's fall.

There was also downward pressure from food, alcohol and recreational activity prices.

The Bank of England's official target for inflation is 2%, but admitted that inflation may turn negative in Spring.

Jeremy Cook, chief economist at the international payments company, World First, said: “There is very little surprise that inflation as a headline reading has continued to move lower through January.

“Food and energy prices have endured record annual falls through 2014 — 2.5% and 16.2% respectively — and we are already starting to see the positive impact that this is having on consumer disposable income. Nobody in the world wants to pay more for food and energy; the falls in prices are a de facto benefit for the economy.

“The other side of the coin is that core prices — inflation without food or energy components — actually rose in January from 1.3% to 1.4%. This shows that underlying prices are nowhere near levels that could in any way be considered deflationary or at risk of deflation."

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