UK inflation fell sharply to 4.6% in October, its lowest rate in two years, according to the latest figures from the Office for National Statistics.
The figure is down from 6.7% the previous month, largely due to lower energy prices after the energy price cap, which limits what suppliers can charge consumers per unit of energy, was lowered.
The Bank of England has also consistently raised interest rates to try and slow price rises.
Alex Veitch, Director of Policy and Insights at the British Chambers of Commerce, said: “The news that CPI eased to 4.6% in October, the lowest level in two years, is encouraging. However, the reality for consumers is that prices are still worryingly high. That is dampening spending and hitting the businesses we represent.
“The data shows prices in the production sector continue to fall with input PPI now at –2.6%. That confirms what companies are telling us. Our Quarterly Economic Survey has been showing a fall in the number of firms expecting their prices to rise for the past five quarters.
“Despite that, firms are still struggling to invest, as they face the challenges of high interest rates, skills shortages and difficult trading conditions.
“Next week’s Autumn Statement is an opportunity for the government to outline a clear strategy for growth. We’re calling for action from the Chancellor on planning, the energy grid, full expensing, business rates and occupational health.
“Movement on these crucial issues can provide a springboard for business investment which will be the cornerstone of economic growth.”
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