UK inflation has fallen to a two-year low, as the cost-of-living squeeze eases, figures from the Office for National Statistics (ONS) showed.
The consumer price index (CPI) dropped to 4.6% in October, down from 6.7% in September and below City expectations for a fall to 4.7%.
On a monthly basis, CPI did not change in October, compared with a rise of 2.0% last year.
Core CPI (excluding energy, food, alcohol and tobacco) rose by 5.7% in the 12 months to October, down from 6.1% in September. The CPI goods annual rate fell from 6.2% to 2.9%, while the CPI services annual rate fell from 6.9% to 6.6%.
The figure was also below City expectations for a fall to 5.8%.
The largest downward contribution to UK inflation came from “housing and household services”, where the annual rate for CPI was the lowest since records began in January 1950, the ONS said.
That’s due to the drop in energy bills last month, after Britain’s energy price cap was lowered.
The ONS said: “Gas costs fell by 31.0% in the year to October 2023, compared with a rise of 1.7% in September. This is the lowest annual rate since records began in January 1989.
“Electricity costs fell by 15.6% in the year to October 2023, compared with a rise of 6.7% in September. This is the lowest annual rate since records began in January 1989.”
Recreation and culture provided the only large positive contribution, the ONS said.