Sharp drop in UK inflation

The headline rate of retail price index inflation fell to 2.6% from 3.2% in September, the Office of National Statistics said.

Labour: inflation rate still not tackling cost of living

Today's fall in inflation rate is "welcome", but is still not countering the rising cost of living, Labour's Shadow Economic Secretary to the Treasury has said.

Catherine McKinnell MP
Catherine McKinnell also said Labour wanted to introduce a lower 10p starting rate of tax. Credit: PA

Catherine McKinnell MP blamed David Cameron for prices still rising faster than wages, adding that "with inflation-busting hikes in energy prices in the pipeline families and pensioners will carry on feeling the squeeze."

She cited Labour's proposed energy bill freeze and childcare expansions as measures that David Cameron has opposed.

Motor fuels and tuition fees help curb inflation

by - Economics Editor

There's been a surprisingly sharp drop in inflation this morning.

Prices rose by 2.2 per cent in October, down from 2.7 per cent the month before and well below economists' expectations.

Petrol pump
A drop in petrol prices was one of the factors in the unexpectedly large inflation drop last month. Credit: PA

The main reasons were a sharp fall in transport costs, mainly motor fuels (for example a drop of 4.9p in petrol in October), and tuition fees.

The latter of these is a mathematical quirk: education costs rose 8 per cent but this was half the rate they were rising a year ago so the comparison contributes to a lower overall inflation figure.

Prices have been rising ahead of wages for years now. It's likely that that trend will be reversed some time next year but today's easing of inflation may bring the end of the squeeze on incomes a little closer.