Falling energy costs have brought UK inflation to a record low, slowing to 0.3 percent in January - the lowest rate since the current set of data began in 1989 according to the UK's Office for National Statistics.

This was down from 0.5 percent inflation in December - economists had forecast that this month's inflation figure would be 0.4 percent.

The Governor of the Bank of England, Mark Carney has speculated that price changes could be negative in the coming months.

The UK economy has not entered a period of deflation in over half a century.

The BOE projects that the UK will average 0.12 percent inflation in this quarter, and 0.03 percent between April and June - and gradually rise above the bank's target rate of 2 percent.

The cost of food and non-alcoholic beverages fell by 2.5 percent year-on-year - while fuels and lubricants dropped by 16.2 percent.

The central bank predicts that wage growth will also pickup - boosting real incomes.

The governor has said that if a period of minimal or negative inflation lasts longer that expected - and the global economy remains weak - the Bank will consider cutting rates below the current record low of 0.5 percent.

It also remains open to the possibility of a new quantitative easing programme if the economy needs further stimulation.