The Consumer Prices Index measure of inflation fell again in the year to October, repeating its 0.1 per cent drop from the previous month, according to the Office for National Statistics (ONS).
The ONS said upward price pressures for clothing, footwear and some recreational goods were offset by downward pressures for university tuition fees, food, alcohol and tobacco.
The figures come after the Bank of England used its November inflation report to suggest there is little evidence of a forthcoming pick-up in price growth. It said there was little risk of inflation overshooting its 2 per cent target even if interest rates remain on hold until 2017.
The report added: “Overall, the Monetary Policy Committee projects that inflation will return to the 2 per cent inflation target in around two years, as domestic cost growth picks up and the drag from past falls in import prices wanes.”
Peter Cameron, associate fund manager for EdenTree Investment Management said the October figures, along with broader global economic conditions, reflected a lack of “immediate pressure” for a rate hike.
But he added: “Inflation could start to pick up fairly quickly next year as the impact of the falling oil price washes out of the numbers and if current levels of wage growth are sustained.
“Therefore rates lift-off is definitely on the horizon, but probably not until the second quarter of 2016.”
