Falling prices of oil and food were the main contributors to the slowdown in growth of the consumer price index from 0.5% in December, the Office for National Statistics said.
Chancellor George Osborne said the record-low inflation was "a milestone for the British economy."
"It's great news for families, whose budgets will stretch even further," Osborne said. "It shows that those who went around predicting a cost of living crisis were plain wrong."