UK inflation falls to lowest point in four months ahead of crunch budget

The rate of Consumer Prices Index (CPI) inflation fell to 3.6% in October, from 3.8% in September, the Office for National Statistics (ONS) said.

This marks the lowest CPI rate since June this year, but above the 3.5% that most economists were forecasting for the month.

A slower increase in gas and electricity prices was the biggest factor putting downward pressure on the overall inflation rate in October, the ONS said.

Ofgem raised the energy price cap by 2% in October, but this is significantly less than the 9.6% hike last year.

Chancellor Rachel Reeves said the latest inflation reading was "good news" for the UK after official figures showed the overall rate fell to 3.6% in October.

She said: "This fall in inflation is good news for households and businesses across the country, but I'm determined to do more to bring prices down.

"That's why at the Budget next week I will take the fair choices to deliver on the public's priorities to cut NHS waiting lists, cut national debt and cut the cost of living."

The Tories blamed Rachel Reeves' last Budget for fuelling inflation after figures showed the rate of Consumer Prices Index inflation fell to 3.6% in October.

Shadow chancellor Sir Mel Stride said: "Inflation has been above target every single month since Labour's last Budget, leaving working people worse off.

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"Labour's last Budget hiked borrowing and taxes, stoking the inflation now hitting families. If Labour had any backbone, they would adopt our £47 billion savings plan and our golden economic rule next week to ease inflationary pressures.

"Only the Conservatives have the leader with a backbone, the plan and the team to stabilise the public finances - reducing inflation and delivering a stronger economy."

ONS chief economist Grant Fitzner said: "Inflation eased in October, driven mainly by gas and electricity prices, which increased less than this time last year following changes in the Ofgem energy price cap. The costs of hotels was also a downward driver, with prices falling this month.

"These were only partially offset by rising food prices, following the dip seen in September.

"The annual cost of raw materials for businesses continued to increase, while factory gate prices also rose."