Low food and petrol prices help inflation

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FOOD prices have helped inflation fall to a record low.

Official figures showed inflation is at 0.3 per cent in January, with food and petrol prices contributing largely.

The Consumer Price Index (CPI) measure of inflation has not been lower since the start of records in 1989, according to the Office for National Statistics (ONS).

It means a basket of goods and services that cost £100 in January 2014 would have been 30p more last month.

Chancellor George Osborne said: ‘Today we see the lowest CPI inflation ever – a milestone for the British economy.

‘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.’

The supermarket price war saw food and non-alcoholic beverage prices fall by 2.5 per cent year on year, the steepest rate on records going back to 1997.

The average petrol price fell by 8.5p per litre over the course of January while for diesel it fell by 7.3p.

It left petrol, at 108.3p, at its lowest level since November 2009 and diesel, at 115.6p - that was the lowest since February 2010.

The price of beer has also fallen.