UK inflation fell to 1.7% in the year to September, the lowest rate in three-and-a-half years, according to figures from the Office for National Statistics.
Lower airfares and petrol prices were the main drivers behind the surprise slowdown, official figures showed.
It means inflation – the rate prices rise at over time – is now below the Bank of England’s 2% target, paving the way for interest rates to be cut further next month. 
David Bharier, Head of Research at the British Chambers of Commerce, said: “The data showing CPI has eased further than expected to 1.7% continues the move away from a prolonged period of high inflation.
“Coupled with an easing to average earnings growth, businesses will be looking forward to a clearer path for further interest rate cuts.
“Our research has shown that a steadily declining number of businesses are concerned about inflation. In our recent Quarterly Economic Survey, 46% of businesses cited inflation as concern, down from the all-time high of 84% seen in 2022. Taxation has instead emerged as the top issue of concern.
“However, major uncertainties remain. With escalations in the Middle East conflict, oil and energy prices are likely to be impacted. Our latest Forecast expects inflation to tick higher towards the end of the year at 2.6%. Core inflation also remains quite stubborn and owner occupiers’ housing costs continue to rise.
“This month’s Budget is a critical juncture. Businesses will need to see action on implementing an effective industrial strategy, solving the investment puzzle and supporting global trade, particularly with the EU.”
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