“These figures provide reassurance that the UK has moved into a more moderate inflation environment, aided by lower fuel prices.
“September’s decline could be reversed this month, given the rise in energy bills following the increase in Ofgem’s energy price cap, which is likely to pull the headline rate back above the Bank of England’s 2% target.
“The notable drop in services inflation suggests that underlying price pressures are becoming less sticky. The squeeze from slower economic activity and weaker wage growth should help keep it on a downward trajectory.
“Though the stars are aligning for a November rate cut, the upcoming Budget is the final hurdle as rate setters will want to assess the inflationary impact of any measures announced before loosening policy again.”
ENDS
Notes to editors:
Contact: ICAEW media office media.office@icaew.com, tom.mackintosh@icaew.com or 07866 853 841