UK inflation fell unexpectedly in April, with lower air fares, clothes and secondhand car prices triggering the first drop in seven months.
Britain’s main measure of inflation, the consumer prices index, fell from 0.5% in March to 0.3% last month, according to the Office for National Statistics. Economists had forecast no change at 0.5%.
The chancellor’s office seized upon the drop in inflation as a sign UK households were better off within the European Union.
A spokeswoman for the Treasury said: “Today’s inflation figure continues the trend we’ve seen over the past year. Pay is growing faster than prices, boosting families’ spending power.
“It is clear Britain would be poorer outside the EU. To avoid putting our economic progress at risk we must continue with the plan that is building resilience and delivering rising living standards across Britain.”
However, the TUC said low inflation was a sign of weakness in the UK economy.
Frances O’Grady, the TUC general secretary, said: “The UK’s continuing low inflation is a sign that the economy still lacks the demand needed to get back to full strength. Wage growth remains too weak and we do not have the level of public investment needed to secure stronger growth.
“With the UK economy slowing down, the government cannot continue to stand by. We need investment in skills, infrastructure and public services to promote growth for the long term.”
Inflation has been below 1% since December 2014, providing respite for UK households as prices rise at a slower rate than pay following six years of real wage falls during the financial crisis.
Despite record levels of employment, wage growth has not picked up as much as Bank of England policymakers and other economists thought.
Regular pay growth, excluding bonuses, was 2.2% in the three months to February compared with the same period a year earlier. It was 1.8% including bonuses.
CPI inflation had been steadily rising from a record low level of -0.1% in September.