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There has been a sharp decline in the rate of inflation to 4.6%, driven by a big easing in energy costs.
The Office for National Statistics (ONS) said the annual rate slowed last month, from the 6.7% figure reported in September, mainly due to the lower energy price cap imposed on households at the start of October.
The same month a year ago saw an unprecedented leap in pre-winter energy bills due to the fallout from Russia’s invasion of Ukraine, sparking the worst of the cost of living crisis.
The war was also responsible for rising food bills, which the official figures showed to be slowing further in October.
“The easing in the annual inflation rates principally reflected negative contributions from three divisions, with large downward effects from housing and household services, food and non-alcoholic beverages, and restaurants and hotels,” the ONS said.
“Recreation and culture provided the only large positive contribution.”
The lower consumer prices index (CPI) inflation figure – which came in below economists’ expectations of 4.8% – is still high but a welcome development for household spending power.
That is because earnings growth has been outstripping inflation since the end of the summer.
The ONS reported earlier this week that the pace of wage growth was running at 7.7%.
It may also produce a sigh of relief in Downing Street as the weaker pace of price increases also means the prime minister’s pledge to halve the rate of inflation this year is currently being met.
At the Bank of England, which paused its cycle of interest rate hikes to tackle inflation in September, there will also be some satisfaction that the ONS data showed no cause for additional alarm.
So-called core inflation, which strips out volatile elements such as food and energy costs, eased back to 5.7% from 6.1%.
However, policymakers will want to see wage increases slow towards the inflation number over fears a spike in demand in the economy could stoke price growth.
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