The UK inflation rate fell sharply to 0.5% in December, the joint lowest on record, official figures show.
Inflation as measured by the Consumer Prices Index fell from 1% in November to its lowest rate since May 2000, helped by cheaper fuel prices.
Low inflation could mean lower interest rates for longer, Bank of England governor Mark Carney told the BBC.
However, he said he still expected rates to "move up over the course of the next couple of years".
A fall of inflation below 1% triggers a letter of explanation from Mr Carney to the chancellor.
This is because the CPI rate is more than one percentage point away from the Bank's 2% target.
The Office for National Statistics (ONS) also said that the Retail Prices Index (RPI) measure of inflation fell to 1.6% from 2%.
The ONS said that in addition to falling fuel prices, the drop in inflation was also due to the rises in gas and electricity prices in December 2013 falling out of the equation.
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