Slower growth in petrol prices and cheaper air tickets helped reduce the annual inflation rate by 0.2 per cent in Britain, official figures showed today.
The Consumer Prices Index (CPI) fell to 1.1 per cent in March from 1.3 per cent in the previous month, according to data from the Office for National Statistics (ONS).
Inflation on the CPI basis was last lower in September 2002 when the annual rate fell to 1 per cent.
The figure is now well below the British government's 2 per cent target and raises pressure on the Bank of England's Monetary Policy Committee to keep interest rates on hold at 4 per cent when members meet in two weeks' time.
Transport costs provided the greatest downward pressure on inflation with petrol price rises lower than a year ago when the Iraq war was at its height.
Cheaper foreign holidays and domestic travel were also responsible for the fall in inflation, the ONS said.
Air fares to many European and British destinations fell this year in contrast to price rises a year ago.
Seasonal increases in the cost of furniture and carpets were not as strong in March as they were a year ago, while clothing retailers extended special offers and brought in replacement stock at lower prices, the ONS said.
But higher gas and electricity bills cushioned the fall in inflation and computer games also became more expensive last month.