Inflation drops to lowest level in more than a year

Inflation growth was significantly lower than expected last month, leading economists to suggest the UK economy has hit a “sweet spot”.

Consumer price inflation grew by 2.2 per cent in the year to October 2.2, falling from 2.7 per cent annualised growth a month earlier. It was the lowest inflation rate since September 2012 and came in well below the predicted 2.5 per cent growth.

A key driver was petrol prices, which fell by 3.5 per cent last month, while falling commodity prices were also beneficial.

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“October’s inflation data suggests that the UK economy is hitting a sweet spot of accelerating growth and falling inflation,” Martin Beck, UK economist at Capital Economics said, although he anticipates the consumer prices index may increase again in November as energy price hikes start to take effect.