Statistics say the cost of food is finally falling - yet sentiment seems very different.
For the first time in nearly six years, average wages are rising faster than inflation.
Slowly but surely the Consumer Price Index is falling, and inflation is now at the lowest level since 2009. Why does that matter?
The rate of Retail Price Index inflation fell to 2.5% from 2.7% in the month before, the Office for National Statistics said.
Inflation matching wage rises in the private sector brought more good news for George Osborne and the Conservative party today, but less good news for Labour, as the figures could go some way to weaken their argument on the cost of living crisis they say ordinary people continue to endure.
ITV News Political Editor Tom Bradby reports on what the figures mean for political parties:
Prime Minister David Cameron welcomed today's inflation figures, saying that they are proof the government's long-term economic plan is working.
Speaking from Hull, Mr Cameron said the figures show that the recovery is gathering pace and the rate of inflation is helping people live a "better standard of life".
Speaking during a trip to Tata Steel in Port Talbot, Wales, Chancellor George Osborne said today's figures showing that inflation had dropped to a four-year low was "further evidence that the Government's longterm economic plan is working."
House prices increased by 6.8% in January 2014 compared with a year earlier, according to the latest figures from the Office for National Statistics .
The ONS said prices grew by 7.1% in England, 6.9% in Wales, 1.4% in Scotland and 2.7% in Northern Ireland.
In January 2014, prices paid by first-time buyers were 7.6% higher on average than in January 2013.
For existing owners, prices increased by 6.5% for the same period.
Responding to today’s inflation figures, Labour welcomed the rise but said that prices are still rising faster than wages.
– Catherine McKinnell, Labour’s Shadow Treasury Minister
This fall in the inflation rate is welcome, but the squeeze continues as prices are still rising faster than wages.
Working people facing this cost-of-living crisis are on average £1,600 a year worse off since David Cameron came to office.
- The largest contribution to the rate fall came from lower petrol prices, utility bills and clothing and footwear
- Furniture and household goods became more expensive
- Books were 6.6% dearer on the year
- Tablet computers and printers were more expensive
- Inflation in food and non-alcoholic drinks fell to 1.8%
- CPIH - a new measure of inflation - fell to 1.6%, down from 1.8% in January
- RPIJ fell to 2%, down from 2.1% in January.