The governor of the Bank of England has said interest rates could be cut further and asset purchases expanded if negative inflation gives way to "bad" deflation.
Outlining the Bank's quarterly Inflation Report, Mark Carney said it was "more likely than not" that the core consumer prices index (CPI) measure of inflation would turn negative in the spring.
However, he insisted that falling prices should be short-lived and that the UK was not expected to experience a damaging spiral into deflation - a more entrenched period of negative price growth.
Mr Carney welcomed weak inflation in the short term, saying that falling commodity costs, particularly oil, provided a boost in spending power to UK households and most businesses.
CPI, which follows the price changes on a range of goods in the economy, currently stands at a joint-record low of 0.5% but has been falling steadily in the past few months given the halving in Brent crude prices.
The latest projections in the report suggested CPI would average around zero in the second and third quarters this year before starting to climb towards the end of 2015.
Mr Carney said the Bank's monetary policy committee (MPC) would need to provide "more support" should negative inflation prove more persistent.
He said the Bank could decide to expand its £375bn quantitative easing (QE) programme to bolster money supply or cut its Bank rate further towards zero from its current level of 0.5%.
It has been at that level for 71 months as the UK economy recovers from the effects of the world financial crisis.
Fears of a spiral into deflation are more real in the eurozone where the European Central Bank is set to introduce its first QE programme from March with bond purchases expected to total €1.1tn (£815bn).
Mr Carney stressed to reporters that low inflation was not the "main story" as the Bank also upgraded forecasts for wages and economic growth in the coming years.
He reiterated that the next change in monetary policy was likely to be a rise in interest rates - something financial markets are not forecasting until mid-2016.
But he conceded that a Greek exit from the eurozone would change the outlook for the UK.
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