Inflation falls below the Bank of England’s target rate of 2% – London Business News | Londonlovesbusiness.com

The Office for National Statistics (ONS) said that inflation has fallen below the Bank of England’s target rate of 2% for the first time since 2021.

The ONS said Consumer Prices Index has fallen from 1.7% in September from 2.2% in August and a sharp slump in petrol prices and lower airfares drove inflation down.

ONS chief economist Grant Fitzner said, “Inflation eased in September to its lowest annual rate in over three years.

“Lower airfares and petrol prices were the biggest driver for this month’s fall.”

Darren Jones, Chief Secretary to the Treasury, said, “It will be welcome news for millions of families that inflation is below 2%.

“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.”

Matt Swannell, chief economic adviser to the EY Item Club, said, “With the momentum behind pay growth also having eased slightly in yesterday’s data, today’s release removes another potential obstacle to the MPC voting for a 0.25 percentage point rate cut at its November meeting.

“The key question now is whether the MPC will step up the pace of rate cuts at subsequent meetings, and this scenario would likely require further good news on pay growth and inflation.”