The Consumer Prices Index measured inflation at 0.3% in the year to January 2015, down from 0.5% in December 2014.
This is the lowest level since the measure was adopted as a national statistic in 1996.
The fall in inflation was mainly due to falling prices for motor fuel due to lower global oil prices, as well as cuts in food prices.
It comes after Bank of England governor Mark Carney warned last week that the UK faced deflation later this year, and that the main measure of inflation would likely remain at zero for the rest of the year.
Responding to the figures, Chancellor George Osborne said that the fall in inflation was ‘a milestone for the British economy’.
He added: ‘It’s great news for families, whose budgets will stretch even further. It shows that those who went around predicting a cost-of-living crisis were plain wrong, and it demonstrates the clear choice between a long-term economic plan that’s delivering stability and rising living standards and the chaos of the alternatives.
‘Although the low inflation is, as the Bank of England confirmed last week, driven by lower food and energy prices rather than damaging deflation, we will remain vigilant to all risks, particularly when the global economic situation is so uncertain.’
Chief Secretary to the Treasury Danny Alexander added that ‘the hard-earned benefits of turning the economy around are now flowing into the pockets of more and more working people’.
He said: ‘With record employment, strong growth, rising wages and low inflation, Britain has a golden opportunity to enjoy a long and sustained recovery. There is still a lot more to do, but this is solid progress son the road to a stronger economy and a fairer society.
