UK inflation falls sharply to 4.6%
UK inflation fell sharply in October to its lowest rate in two years, largely due to lower energy prices.
Inflation, which measures the rate at which consumer prices rise, dropped to 4.6% in the year to October, down from 6.7% the month before.
The figure means a government target to halve inflation by end of the year has been met early.
But there is a limit to how much credit ministers can take for the fall as energy prices settle.
Economists have said the main reason inflation has fallen from its peak of 11.1% in October 2022 is due to fall in the energy price cap, which limits what suppliers can charge consumers per unit of energy.
They also note the Bank of England’s decision to raise interest rates, which are currently at 5.25%.
Grant Fitzner, chief economist at the Office for National Statistics (ONS), said inflation fell as “last year’s steep rise in energy costs has been followed by a small reduction in the energy price cap this year”.
“Food prices were little changed on the month, after rising this time last year, while hotel prices fell, both helping to push inflation to its lowest rate for two years,” he added.
Although the signs point to the cost of living easing, many households will not feel better off, especially when it comes to energy bills.
Despite gas and electricity prices being lower than last year, most households will actually pay more for energy this winter than last, because government support for bills is no longer in place.
Responding to the latest inflation figure, Prime Minister Rishi Sunak said he had made halving inflation his “top priority”.
“I did that because it is, without a doubt, the best way to ease the cost of living and give families financial security,” he said.
However, Labour’s shadow chancellor Rachel Reeves said that while the fall in inflation would grant “some relief for families”, now was not the time for Conservative ministers to be “popping champagne corks and patting themselves on the back”.