UK annual inflation rate eased to 3.0% in January, down from 3.4% in December, official figures show.
The Office for National Statistics said falling petrol prices helped push inflation to its lowest level since March last year.
The slowdown strengthens expectations that the Bank of England could cut interest rates as early as next month.
The central bank kept its benchmark rate at 3.75% this month but signalled that cuts are likely as inflation moves closer to its 2% target.
ONS chief economist Grant Fitzner said easing fuel costs drove the decline, though higher water bills and other household costs remain a pressure.
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The outlook is mixed. Unemployment stands at a five-year high of 5.2%, while wage growth has cooled in the private sector but remains high in public services.
Prime Minister Keir Starmer’s Labour government faces pressure to revive growth after tax rises in recent budgets.
Finance minister Rachel Reeves said government budget decisions were helping to bring inflation down.
UK Official data also shows the economy grew less than expected at the end of 2025. The Bank of England now forecasts 0.9% growth this year.
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