The Consumer Prices Index grew by 1.0% in the year to November 2014, down from 1.3% in October.
The figures were reported by the Office of National Statistics.
The Retail Prices Index, which is not a National Statistic, grew by 2.0% in the year ending November 2014, down from 2.3% in October.
CPIH, which is not a National Statistic, grew by 1.0% in the year to November 2014, down from 1.3% in October.
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The ONS reported this morning: "The rate of inflation faced by households has fallen to a 12-year low.
"The Consumer Prices Index, which measures changes in the prices of the goods and services bought by households, increased by 1.0% in the year to November 2014, down from 1.3% in the year to October.
"The last time the rate was as low as 1.0% was September 2002 and it was last lower than this in June 2002 when 0.6% was recorded.
"Falls in transport costs and in the prices of alcohol and certain recreational and cultural goods were the main contributors to the slowdown in the rate of inflation between October and November.
"Petrol prices fell by 3.0 pence per litre on the month this year compared with a more modest 1.7 pence fall a year ago while changes in air fares and second-hand car prices also had downward effects on the change in the rate."
Sylvia Waycot, editor at Moneyfacts.co.uk, said: "The rate of inflation may have fallen but it is still going to be a 'Bah humbug' Christmas for savers thanks to the paltry interest paid on savings.
"Many older savers will be dreaming of the new Pensioner Bond, but I doubt there will be enough to go round and fear it will cause even more heartache for those who miss out.
"The rest of us have a total of 365 savings accounts (176 fixed bonds, 19 notice, 15 no notice and 155 ISAs) to choose from that pay enough interest to negate the effects of tax and inflation.
"The average interest paid across the ISA range is just miserable at 1.45%, even less than last year when it was 1.65%.
"Inflation has hit a 12 year low which has made a difference to the number of accounts that can beat tax and inflation. However, for any real difference to be felt, savers especially those reliant on savings income to fund retirement, are still desperate for an overall improvement on the savings rates offered."

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