The Consumer Prices Index (CPI) fell from 5% to 4.8% in November, figures from the Office for National Statistics (ONS) show.
The Retail Prices Index, which includes mortgage interest payments, also fell by 0.2% in the month, from 5.4% to 5.2%.
A number of factors contributed to the fall in inflation, including a slowdown in food price increases.
The rising costs of transport, clothes and furniture also slowed down in the month, although this was partially offset by rises in alcohol, tobacco and energy prices.
Despite the falls, the rate of inflation remains well in excess of the official target of 2%.
Research conducted by Moneyfacts.co.uk shows that to beat inflation, a basic rate taxpayer at 20% needs to find a savings account paying 6.00% per annum, while a higher rate taxpayer at 40% needs to find an account paying at least 8.00%.
Today there is not a single savings account that taxpayers can choose to negate the effects of tax and inflation whether it is CPI at 4.8% or RPI at 5.2%.
The effect of inflation on savings means that £10,000 invested five years ago, allowing for average interest and tax at 20%, would have the spending power of just £9,210 today.
"Savers continue to lose out to inflation even though the rate fell today," said Sylvia Waycot, spokesperson for Moneyfacts.co.uk.
"With returns so low and inflation unsteady, people don't know which way to turn.
"Over the last year the number of savings accounts that beat inflation for basic rate taxpayers has dropped successively from 57 to absolutely none, which must leave savers wondering why they save at all."
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