UK inflation falls to its lowest level on record

British officials say the rate of inflation fell in January to an annual 0.3 per cent the lowest level on record amid falling energy prices and supermarket price wars.

The Office of National Statistics said Tuesday the rate is down from December’s rate of 0.5 per cent.

Bank of England Governor Mark Carney has predicted that inflation may turn negative in the coming months, but said he believed low inflation to be a short-term phenomenon that would boost spending among consumers.

Inflation is well below the central bank’s 2 per cent target rate, but Carney told reporters last week the bank will “look through” what it sees as temporary drops.

Policymakers fear long periods of sustained falling prices, because it could encourage consumers to delay purchases in hopes of bargains later.