How low is too low? That's the question economists are asking today after the Consumer Price Index (CPI) inflation rate dropped from 1% to 0.5%.
It's the lowest official inflation number for a decade-and-a-half, and the first time it has halved in the space of a month.
Moreover, with oil prices continuing to fall – now below $50 a barrel on the Brent crude international measure – the likelihood is that the CPI will only continue to fall.
At the very least it will drop to the lowest level since comparable records began in 1989. It may even drop into negative territory.
Should consumers be concerned? No. In the short term, this fall is good news – the equivalent of a tax cut for most consumers.
In fact, according to calculations by Capital Economics, the fall in petrol prices alone should put £455 back into the average household's pockets.
The fact that lower energy prices also push down a host of other costs should continue the 'tax cut' in coming months.
Moreover, with inflation at 0.5% it is now comfortably below the rate at which wages are increasing (1.6%, excluding bonuses) – so the longest squeeze on living standards since Victorian times is now at an end.
Finally, because inflation is well below the Bank of England's 2% target, it is even less likely to raise interest rates in the near future.
Market expectations for the date of a rate increase have now shifted from this summer to next spring. And the expected level in five years is now 1.4%, compared with 2% expected a couple of months ago.
That means more impetus for consumer spending in the coming months and, perhaps, an even stronger recovery later this year (though the near-term turbulence in Russia and elsewhere caused by falling oil prices might weigh on growth in the immediate future).
However, it's not all good news. There is good deflation and bad deflation. Good deflation, of the kind depicted above, is a temporary cut in prices – a temporary boost to consumers' real incomes.
No one changes their behaviour or spends less as a result – quite the contrary. Bad deflation is the kind witnessed in the US in the 1930s when prices fell for a prolonged period of time along with wages.
Because this deflation lasts longer, and is associated with weaker growth, it is trickier to shake off.
There are serious concerns this kind of deflation is taking hold in Europe – quite apart from recent oil-led falls. Indeed, in certain countries, such as Greece, this 1930s-style deflation is already quite evident.
Prices are now falling across the Eurozone, and if economists' forecasts are to be believed, they could stay low for some time.
That's why the European Central Bank looks likely to engage in full-blown quantitative easing either this month or soon afterwards.
The only question is quite how it has managed to structure the programme so it doesn't fall foul of the inflation hawks at the Bundesbank.
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