UK's FTSE hits new record high but Wolseley falls

* FTSE 100 reaches new record highs

* Wolseley (LSE: WOS.L - news) falls after H1 earnings

* UK annual CPI (Other OTC: CPICQ - news) inflation hit zero in February

By Sudip Kar-Gupta

LONDON, March 24 (Reuters) - Britain's top share index reached new record highs on Tuesday, boosted by strong German economic data and new signs of low inflation that would boost consumers' spending power.

However, shares in plumbing supplies group Wolseley, which hit an eight-year high on Friday, fell 2.4 percent after it posted a smaller-than-expected increase in first-half earnings.

The blue-chip FTSE 100 rose 0.3 percent to a new record intraday high of 7,061.90 points.

Data on Tuesday showed that British inflation fell to zero last month, as lower prices for food and computer goods left consumer prices unchanged from a year earlier for the first time on record.

The unchanged cost of living will be welcome news for many Britons in the run-up to a national election on May 7, especially as annual wage growth slipped to 1.8 percent at the start of the year.

Rob Hepworth, chief investment officer at Ecclesiastical Investment Management, said the low inflation would boost the UK stock market as it meant British interest rates would stay at record lows for the near term.

"Lower prices for essential, everyday items like food and fuel is a tailwind for the UK economy and also probably pushes interest rate rises even further out into the distance," said Hepworth.

European stock markets were also buoyed after data showed that the private sector in Germany, Europe's largest economy, grew in March at its strongest rate since July.

Some traders expected a short-term pause in the FTSE's winning streak, which has seen the FTSE finally get over the 7,000 point barrier. The FTSE is up around 8 percent since the start of 2015.

"I expect a bit of consolidation," said Manoj Ladwa, head of trading at TJM Partners. "I'd wait for a pullback below 7,000 before going long," he added. (Additional reporting by Francesco Canepa; Editing by Andrew Heavens)