Inflation has fallen to its lowest level in 15 years.
Figures reported today show the consumer price index, which measures inflation, fell to from 1 per cent in November to 0.5 per cent in December.
Jonathan Prynn, Business Consumer Editor for the Evening Standard, joined Headline London to discuss what this means for consumers.
The drop is lower than expected. It follows the plummeting oil prices and also low food costs, as supermarkets do their best to undercut each other.
Gas and electricity have also been cheaper in recent months - and today, energy provider Eon announced it is lowering gas prices by an average 3.5 per cent.
Economists are predicting inflation may go lower still, which is good news for consumers and house buyers looking to secure a fixed mortgage. Average house prices have also fallen for the third month in a row.
It means people may be able to pay off debts more easily. However, as interest rates are unlikely to go up, savers will miss out.