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Falling petrol prices and a slower rise in the cost of food contributed to a drop in UK consumer price inflation during February.
The rate fell from 3% to 2.7%, the lowest figure since July 2017.
The fall eases pressure on the Bank of England to raise interest rates. There had been speculation it could raise rates at its meeting in May.
The figures suggest the squeeze on households, caused by rising inflation and stagnant wages, may be ending.
The ONS will publish the latest pay growth figures on Wednesday.
Economists expect those figures to show pay growth edged higher, to an annual rate of 2.6% in the three months to January.
And the situation could improve further this year, according to the Bank of England. It expects wages to grow more quickly than inflation.
The price of petrol and food played a key part in this month's figures.
Petrol prices fell by 0.2p per litre on the month, while diesel dropped by 0.1p.
Food prices rose by 0.1% between January and February, compared with a 0.8% rise the year before.
Last year's figure was boosted by a shortage of salad and vegetables, when crops in southern Mediterranean countries were hit by bad weather.
The main rise in the cost of living came from clothing and footwear prices, especially women's shoes, which went up by 1.7% on the month, compared with 1.2% in 2017.
Consumer price inflation hit a six-year high of 3.1% in November and has been edging lower since then.
Phil Gooding, from the Office for National Statistics, said: "Many of the early 2017 price increases due to the previous depreciation of the pound have started to work through the system.
"Hotel prices also fell and the cost of ferry tickets rose more slowly than last year, when prices were collected on Valentine's Day, when many people could have been taking mini-breaks.
Mel Stride, financial secretary to the Treasury, said: "We know families feel the cost of living at the end of every working week.
"We are increasing the National Living Wage which is already helping the lowest earners see their pay rise by almost 7% above inflation."
It's not quite time to celebrate the end of the squeeze on living standards - aka the ongoing real terms pay cut that the average worker has suffered for most of this decade. But it may be the beginning of the end.
Most economists had expected the cost of living to rise by less than it did last time, but they hadn't quite anticipated such a sharp slowdown.
We don't yet have the figure for pay rises for the same month (average earnings data lags the inflation figures by two months). But if the most recent figure of 2.5% proves to have held steady or even risen slightly, the squeeze has definitely loosened its grip.
Upward pressure on prices from the weaker pound following the Brexit vote has now largely fed through to the supermarket shelves. And the pound's more recent rise means the cost of raw materials isn't rising as fast - so there's little sign of further inflation in the pipeline.
However, the lower than expected inflation rate hasn't changed the outlook for interest rates much. The City continues to expect another rise in rates in May.
Andrew Sentance, senior economic adviser at PwC, said: "It is not a surprise to see UK inflation starting to fall back.
"Forecasters were expecting price increases to ease back this year. But the rate of reduction is likely to remain slow and volatile. The fact that Easter is early this year could push inflation back up again in March.
"This fallback in inflation therefore provides little reason for the Bank of England to hold back from gradually raising interest rates.
"A further interest rate rise would be justified this spring."
However, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Inflation is falling back to the 2% target much more rapidly than the Monetary Policy Committee (MPC) expected - undermining the case for raising interest rates again as soon as May.
"We think that the MPC will refrain from ratcheting up its guidance and won't clearly signal an imminent rate rise in the minutes of Thursday's meeting, prompting markets to reassess their view that the chances of a May rate hike are as high as 80%."
