UK inflation unexpectedly drops to lowest level in over three years
UK inflation unexpectedly dropped to 1.7% in the year leading up to September, marking the lowest rate in over three years and a half.
Lower airfares and petrol prices were the main drivers behind the surprise slowdown, official figures showed, News.Az reports, citing BBC.It means inflation - the rate prices rise at over time - is now below the Bank of England's 2% target, paving the way for interest rates to be cut further next month.
September's figure is normally used to set how much many benefits rise next April.
This includes the biggest: Universal Credit, which goes up at ministers' discretion.
All the main disability benefits - personal independence payment, attendance allowance and disability living allowance - as well as carer’s allowance, go up by at least September's inflation rate by law.
But a rise of 1.7% for benefits would be less than April's expected rise in the state pension of 4.1%, which is determined by the so-called triple lock.
The Office for National Statistics (ONS) said petrol and diesel prices were significantly lower, dropping by 10.4% in September compared with the same month a year earlier.
The cost of fares for domestic, European and long-haul flights also dragged down the inflation rate. Fares normally fall after the summer rush, but they fell more than normal.
However, households were hit by an uptick in the pace of food and non-alcoholic drink price rises, with costs jumping for milk, cheese, eggs, soft drinks and fruit.
The ONS said September marked the first time food price inflation had "strengthened" since early last year.
Chief secretary to the Treasury, Darren Jones, said the drop in the pace of price rises overall would be "welcome news for millions of families".
"However, there is still more to do to protect working people, which is why we are focused on bringing back growth and restoring economic stability to deliver on the promise of change," he added.
Falling inflation does not mean the prices of goods and services overall are coming down, it is just that they are rising at a slower pace.
The surprise fall in the UK's inflation rate comes ahead of this month's Budget, with Chancellor Rachel Reeves looking to make to make tax rises and spending cuts to the value of £40bn.
Reeves, who is finalising details of her first Budget on 30 October, warned ministers there would be "difficult decisions on spending, welfare, and tax".
She is drawing up plans to find £40bn to avoid real-terms cuts to government departments.
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