Britain's inflation rate unexpectedly fell in September to its lowest in six months, official data showed today.
The Office for National Statistics in Britain said annual growth in the Consumer Price Index slipped to 1.1 per cent last month from 1.3 per cent in August and bucking expectations for a rise to 1.4 per cent.
The drop was mainly due to falls in airfares but there were broad declines in other categories as well, particularly food and telephone charges.
The news is likely to bolster expectations that borrowing costs will not go up again this year.
The CPI is now running well below the government-set 2 per cent target. Under the Bank of England's remit, it would only have to fall another 0.2 percentage point more for the Governor to be forced to write a letter to the Chancellor of the Exchequer explaining why it is so low.
The data are likely to fuel expectations that base interest rates, currently at 4.75 per cent, will not go up again this year particularly as a run of weaker data have suggested the economy slowed sharply in the third quarter.
But the figures came one day after a report that said prices of goods leaving the factory gate rose at their fastest annual pace in September in more than eight years.
Airfares dragged down the CPI growth rate by 0.06 per centage point and sea fares dragged it down by 0.03 per centage point, as seasonal reductions were greater than a year ago, the ONS said.
