The Bank of England has warned that inflation could fall below 1% in the next six months, owing to lower food, energy and import prices, as well as feeble growth in Europe and elsewhere.
Governor Mark Carney said he did not expect inflation to reach the targeted rate of 2% for three years.
The Bank also cut its prediction for UK economic growth in 2015 to 2.9%.
However, the Bank said it expected average salaries to be growing by 2% by the end of 2015.
Earlier, official figures showed average wages excluding bonuses grew by 1.3%, which was just above the latest rate of Consumer Prices Index inflation and the first time it has risen above that measure in five years.
The Office for National Statistics figures also showed that unemployment in the UK fell by 115,000 in the three months to the end of September, to a total of 1.96 million.
via BBC 
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