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UK inflation falls to 2.2% in October

image captionThe ONS says transport costs have been falling

The UK's inflation rate, as measured by the consumer prices index (CPI), fell to 2.2% in October from 2.7% the month before.

The surprise fall saw CPI inflation drop to its lowest rate for more than a year, and eases pressure on the Bank of England to raise interest rates.

The figure was below forecasts of 2.5% and is the lowest since September 2012.

The Office for National Statistics said the fall was driven by the biggest drop in transport prices since July 2009.

It said transport prices fell by 1.5% between September and October.

One major transport cost factor came from fuel price cuts at many major supermarket chains engaged in a price war.

There were also downwards price movements on some air fares.

Inflation target

Another inflation fall came in education costs, with the impact of rising tuition fees being smaller than at the same time a year previously.

And food inflation fell too, from 4.8% to 4.3%.

"Falling petrol and diesel prices seem to have done the most to drag the inflation rate down, and the ongoing softness in Brent crude prices means there may be a little more of this to come in the months ahead," said economist Rob Carnell at ING.

"There was also some price softness in furniture and household items too."

A separate measure of inflation, the retail prices index (RPI), fell from 3.2% in September to 2.6% in October.

The drop in the inflation rate means the Bank of England is considerably closer to its inflation target of 2%, which it has exceeded since December 2009.

However, recently announced price rises by most of the UK's large energy firms have yet to take effect and will have an inflationary impact in the coming months.

The Bank will publish its latest inflation forecast on Wednesday.

"The Bank of England's forward guidance states that a hike in interest will not be considered until unemployment drops below 7%," said economist Chris Williamson at Markit.

He said the Bank's forecast was likely to "bring forward when the Bank expects this to happen from late 2016 to perhaps late 2015, given the recent flow of stronger than expected economic data".

Related Topics

  • UK economy