The Consumer Prices Index inflation fell to 0.3% in January – the lowest level since the Office for National Statistics (ONS) began recording in 1997.
The falling price of fuel and food pushed the CPI down from 0.5% in December, 2014.
In the year leading to January, food prices have slumped by 2.8% and fuel prices have plummeted by 16.2%.
A supermarket price war has also contributed to the fall in the inflation rate.
The Bank of England has said that this year will see inflation drop below zero this year, for a short period of time at least.
Ben Brettell, a senior economist at Hargreaves Lansdown, said that this is all positive for the consumer: "The combination of low inflation, rising wages and falling fuel prices are great news for the UK consumer. Last week the Bank of England forecast real after-tax incomes would rise 3.5% this year, the strongest growth for 10 years."
However, Cathy Jamieson, Labour's Shadow Treasury minister, highlighted that Britons are still no better off: "Inflation is falling around the world because global oil prices have plummeted. But in Britain wages continue to be sluggish and working people are £1,600 a year worse off under this government.
"A few months of falling world oil prices won't solve the deep-seated problems in our economy."