In welcome news for many defined benefit pension schemes, the 12-month Consumer Prices Index (CPI) slipped back to zero in August, according to the Office for National Statistics (ONS).
This is the seventh month the inflation measure, which is used by around half of schemes for uprating benefits each year, has been at or around zero.
The Retail Prices Index - dropped by the ONS as a national statistic but still used by many schemes and for most index-linked bonds - stood at 1.1%.
The ONS said inflation had been held down by falling energy prices and slowing increases in the price of clothing.
ONS Head of CPI Philip Gooding said: "CPI has fallen to 0.0%. This means that, overall, prices in August were at the same level as the previous August. The fall was mainly due to clothing and motor fuel prices."
CPIH, which incorporates a measure of housing costs into CPI, was higher at 0.3% while RPIJ, which measures the same basket of goods as RPI but uses an improved methodology, stood at 0.5%.
Hargreaves Lansdown senior economist Ben Brettell said the figures were not surprising, with the Bank of England expecting inflation to begin rising slowly by the end of the year.
He added that the fall in core inflation, which strips out the more volatile goods, to 1% would ease pressure on the bank to raise interest rates.
Brettell said: "Last month's jump from 0.8% to 1.2% had prompted suggestions that underlying inflationary pressures could be building, but today's drop could provide the bank with some breathing space to leave interest rates on hold for longer in the face of global concerns."
He said it was unlikely UK rates would rise before spring.
But he added: "With domestic growth and the labour market recovery looking healthy, if unspectacular, some policymakers are increasingly considering that higher rates are appropriate. Rate-setter Martin Weale said last week that rates would have to rise ‘relatively soon', and another MPC member Kristin Forbes has also said they will probably rise in the near future.
"Both voted to leave rates on hold at this month's meeting, but their rhetoric suggests they might soon join Ian McCafferty in voting for a rise of 25 basis points."
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