LONDON: British inflation fell by more than expected last month, including key measures watched by the Bank of England, according to data on Wednesday that bolstered bets on an interest rate cut next month.
The rate of annual consumer price inflation dropped to 1.7% in September from 2.2% in August, the lowest reading since April 2021, the Office for National Statistics said.
A Reuters poll of economists had pointed to a reading of 1.9%.
Sterling fell by half a cent against the U.S. dollar immediately after the figures were published.
Core inflation, which excludes the energy, food, alcohol and tobacco, dropped to 3.2% from 3.6% in August.
"Lower airfares and petrol prices were the biggest driver for this month's fall. These were partially offset by increases for food and non-alcoholic drinks, the first time that food price inflation has strengthened since early last year," ONS chief economist Grant Fitzner said.
There were also signs of weaker inflation pressure ahead. Prices charged by factories for their goods fell by 0.7% in the year to September, the biggest fall since October 2020, during the COVID pandemic. - Reuters
