The UK consumer prices index fell to 0.5 per cent in December.
This is equal to the lowest level on record, the measure having fallen from 1 per cent in the previous month.
According to the Office for National Statistics (ONS), which compiles the figures, the collapse in oil prices was amongst the primary factors behind the drop.
Oil has fallen from to its lowest level in six years, with a barrel now costing around $47.
Analysts suggest that the price of oil could fall even further, contributing to reductions in petrol prices at the pump.
Some commentators believe that the average pump price could fall below £1 per litre.
Bank of England Governor Mark Carney will now have to write a letter of explanation to George Osborne, as the inflation measure is more than one per cent away from the official 2 per cent target.