Inflation is expected to have fallen below the Bank of England's 2% target for the first time in more than four years in January thanks to retailers slashing prices and lower fuel costs.
Many economists believe official figures out tomorrow will reveal a fall in the Consumer Prices Index (CPI) to 1.9% last month from 2% in December, which will mark the first time inflation has dropped below the target since November 2009.
It follows last month's aggressive discounting by food and general merchandise retailers.
The British Retail Consortium (BRC) said shop prices fell at their fastest rate since its records began last month, falling by 1% against 0.8% in December.
Prices have also been easing at petrol forecourts, while the recent round of energy tariff increases are set to be lower than a year earlier due to the Government's move to reduce environmental levies on bills.
Jonathan Loynes, economist at consultancy Capital Economics, added that while E.ON and EDF hiked prices, British Gas scaled back its recent price rise by 3.2% after the green levy move.
The CPI fell to target in December for the first time in four years, beating expectations for a small rise and easing a lengthy period of stubbornly high inflation for cash-strapped households.
Experts expect the UK to benefit from below target inflation for some time.
The Bank of England's own forecasts in last week's quarterly inflation report showed CPI falling below target in the first quarter, giving it breathing space to keep rates at record lows of 0.5% for at least a year.
Mr Loynes said there was "every chance" inflation could drop as low as 1% by the end of the year.
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