The UK inflation rate fell to 0.3% in January - the lowest annual rate on record, official figures show.
The rate of Retail Price Index inflation also fell to 1.1% from 1.6% the previous month.
The Office for National Statistics said falling prices for food and fuel were the main factors behind the drop.
ITV News Economics Editor Richard Edgar said the 0.9% fall in inflation over the past year is the largest since 2001.
The fall in inflation over the past year - 0.9% - is the largest since 2001
Nick Clegg has hailed government plans for a £5billion regional pot as opening a new era for England's regions.
"This is something that turns a page of decades, generations of over-centralised bossiness from Whitehall," the Deputy Prime Minister told Good Morning Britain.
"I'm really excited because you just get a lot more bang for your buck."
The shadow business secretary has dismissed an extra £5 billion spending on regional growth as falling "far short" of Labour plans.
Labour MP Chuka Umunna said that the Conservative-led coalition had failed to deliver on promises to rebalance England's economy and ensure growth was not concentrated in the capital.
"Instead we've seen things go into reverse as regions and local areas have been held back," he said.
He said that a Labour Government would allow regional authorities to take over £30 billion of spending across the country.
The prime minister David Cameron has said that an extra £5 billion in investment for England's regions over the next five years will help to kick-start growth across theUK outside of the capital.
"For too long our economy has been too London-focused and too centralised. Growth deals will help change all that," he said.
He said that the scheme could turn regional towns and cities in economic "powerhouses" and create thousands of new jobs. "
Deputy Prime Minister Nick Clegg, who chairs the local growth cabinet committee, also hailed the announcement as marking the end of a culture of "Whitehall knows best" and helping to end an over-reliance on the banks and the City of London.
England's regions are set to benefit from an extra £5 billion in investment under Government plans to re-balance the country's economy and create thousands of new jobs outside the capital.
The cash will be allocated to local authorities and businesses through a series of local "growth deals" for investment in projects including building new homes, improving transport links and opening up new training opportunities.
Officials said that the funding, which would be released over five years from 2015, would lead to work on over 150 roads, 150 housing developments and 20 stations as well as create new jobs and training opportunities outside the capital.
The £61bn contributed to the economy by over-65s "redefines what it is to be an 'older person'" according to Age UK.
Caroline Abrahams, charity director of Age UK said the usefulness of those over the age of retirement should not be overlooked, particularly as Britain had an ageing population:
These figures demonstrate the huge contribution that older people are making to our economy.
To put them in perspective, local authorities in England currently spend considerably less - just under £10 billion - on social care for older people.
Many will be surprised by just how much older people contribute but it's time we appreciated that they are playing a more and more important part in creating our prosperity.
Older people bring a great deal of knowledge, skill and energy, as volunteers and as paid employees, and in doing so they are redefining what it means to be 'an older person'.
Workers over the age of retirement helped to generate £61bn for the UK economy last year, according to new figures from charity Age UK.
Over 65s contributed via employment, informal caring and volunteering, Age UK said.
The Age UK Chief Economist's report found that £37 billion of the total amount came from employment and £11.4 billion from informal caring.
Childcare contributed £6.6 billion and nearly £6 billion came from volunteering.
A key credit rating agency has upgraded its opinion of the future prospects for the UK economy in light of its "robust and broadening" recovery.
Standard & Poor's (S&P) affirmed its top AAA rating on British sovereign debt and said it was switching its outlook from "negative" to "stable".
S&P has forecast growth of nearly 3% this year and 2.5% in 2015, saying it did not think fast-rising London house prices posed a risk to stability and that future rises would be "more contained".
But it warned that the rating would be at risk should Britain vote to leave the EU in the in/out referendum promised by David Cameron if the Conservative Party wins the next General Election.
The head of the International Monetary Fund has welcomed the UK's economic progress over the last year but warned of major risks that remain.
Delivering the IMF's annual report on the state of the British economy, Christine Lagarde said that "the news coming out of the UK has been pretty much all good".
She pointed to the UK's growth rate being the highest of the advanced economies, along with signs that the economy is "rebalancing" towards a more investment-driven economy.
However, she also identified two major risks to Britain's prosperity - weak productivity and the the rapid rise of house prices.
"There is no room for complacency as there are risks looming on the horizon," Ms Lagarde said.
Profits have risen at UK Asset Resolution, the company set up by the Treasury to take on the unwanted mortgage book from Northern Rock and Bradford & Bingley.
ITV News Business Editor Joel Hills is following developments.
Bad bank doing rather well. UKAR (N Rock + B&B's unwanted mortgage book) posts profit of £1,259m for year to 31 March 2014, up £186m.
The total number of NR and B&B mortgage accounts three or more months in arrears fell 39% to 15,483 in last 12 months.
93% of UKAR's 529,000 mortgage accounts up-to-date with payments. Thanks to "more positive housing market and improving economic outlook".