UK inflation falls to lowest level in nearly three years
The UK's headline inflation rate fell to its lowest level in nearly three years in October, according to figures released by the Office for National Statistics on Wednesday.
The consumer price index rose 1.5% year-on-year, down from 1.7% in September and marking the lowest headline inflation since November 2016 and leaving CPI below the Bank of England's 2% target for the third month in a row. Economists had expected the rate to slip to 1.6%.
An ONS spokesperson said: "A fall in utility prices due to a lowering of the energy price cap helped ease inflation in October. However, this was partially offset by rising clothing prices."
Gas and electricity prices declined 8.7% and 2.2% month-on-month, respectively, following a cut to Ofgem's price cap. Further downward contributions came from furniture, household equipment and maintenance and recreation and culture.
Core inflation, which strips out volatile food and energy items, was unchanged at 1.7%, in line with consensus expectations.
On a monthly basis, the consumer price index was down 0.2% following a 0.1% rise in September and versus expectations for a 0.1% dip.
Ruth Gregory, senior UK economist at Capital Economics, said: "October’s consumer price inflation figures were in line with the Bank of England’s expectations so they are unlikely to move the dial on the outlook for interest rates.
"Overall, the figures do little to change our view that inflation will spend more time below 2% than above it in 2020 and that if Brexit is delayed further, interest rates will be cut, in May 2020."