The consumer prices index (CPI) measure of inflation in the UK halved last month to 0.5%.

Economists cited the continuing fall in global oil prices and the price battle between supermarkets as the main reasons for this shock reduction.

Dennis de Jong, managing director at UFX.com said: “Mark Carney was always going to have to write a letter of explanation to the Chancellor with inflation certain to drop below 1% early this year, but he wouldn’t have expected today’s reading of 0.5%.

“Plummeting oil prices and the ongoing supermarket price war could see inflation tick down further over the next few months and that is a worry for the government. Predicting when interest rates will finally rise is about as easy as guessing who’s going to win the general election.”