UK inflation drops sharply as PM says pledge has been ‘delivered’

Consumer Prices Index inflation was 4.6% in October, down from 6.7% in September, according to data from the Office for National Statistics.

UK inflation dropped sharply to the lowest level in two years last month (PA) (PA Wire)

UK inflation dropped sharply to the lowest level in two years last month, as the Prime Minister said his pledge to halve inflation by the end of the year has been “delivered”.

Consumer Prices Index inflation was 4.6% in October, down from 6.7% in September, according to data from the Office for National Statistics (ONS).

The slowdown in inflation came after energy prices soared last year.

Energy bills were capped at £2,500 last year for the typical household, but this year, industry regulator Ofgem has capped bills at £1,834 for the typical household as prices have fallen.

Slowing inflation was also driven by house prices, which saw the lowest CPI rate since records began in 1950.

Prime Minister Rishi Sunak said: “In January I made halving inflation this year my 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.

“Today, we have delivered on that pledge.”

Mr Sunak had pledged to halve inflation to below 5.4% by the end of the year.

October’s CPI figure marks the lowest level since October 2021, when CPI stood at 4.2%.

Food and non-alcoholic drink inflation eased to the lowest level since June last year, providing some relief for households squeezed by the higher cost of living.

Inflation fell substantially on the month as last year’s steep rise in energy costs has been followed by a small reduction in the energy price cap this year

ONS's chief economist

Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, said: “While the Prime Minister has achieved his target to halve inflation this year, this owes more to the downward pressure on prices from falling energy costs and rising interest rates than any Government action.”

Shadow chancellor Rachel Reeves said the Government should not be “popping champagne corks” about the drop in inflation, with people still struggling with the cost of living.

“After 13 years of economic failure under the Conservatives, working people are worse off with higher mortgage bills, prices still rising in the shops and inflation twice as high as the Bank of England’s target,” she said.

The ONS’s chief economist Grant Fitzner said: “Inflation fell substantially on the month 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.

“The cost of goods leaving factories rose on the month. However, the annual growth was slightly negative, led by petroleum and basic metal products.”

The latest figures also showed the CPI measure of inflation including housing costs (CPIH) was 4.7% last month, down from 6.3% in September.

The Retail Prices Index (RPI) meanwhile slowed to 6.1% from 8.9% in the previous month.