05:48 13 November 2013
The UK’s inflation rate, which is measured by the consumer price index, slowed to 2.2per cent in October from 2.7per cent the month before. This is the lowest since September 2012. This eases the pressure on the Bank of England to raise interest rate. The Office for National Statistics confirmed that the reason for the surprise fall was the drop in transport prices since July 2009.
Economist Rob Carnell at ING said: "Falling petrol and diesel prices seem to have done the most to drag the inflation rate down, and the ongoing softness in Brent crude prices means there may be a little more of this to come in the months ahead.”
"There was also some price softness in furniture and household items too."
However, UK inflation rate is expected to rise again as recently announced price increase by most of the UK’s larges energy firms hasn’t been factored yet. This is expected to have an inflationary impact in the coming months.
Economist Chris Williamson at Markit, said: "The Bank of England's forward guidance states that a hike in interest will not be considered until unemployment drops below 7%.”
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