Consumer price inflation (CPI), the measure of the average price of consumer goods and services purchased by households, declined in January to an annual rate of 3%.

According to official figures CPI in December 2008 stood at 3.1% so this fall is less than many experts predicted, although this is the fourth month in succession that inflation has fallen.

The Retail Prices Index (RPI) also fell at the start of the year, down from 0.9% to 0.8% - meaning that this is now the lowest RPI level since 1960.