UK inflation has dropped to 4.6 percent, down from 6.7 percent in September.
This is the first time inflation has dropped below five percent in the last two years when figures for October were published this week.
Consumer Prices Index including owner occupiers’ housing costs fell to 4.7 percent, down from 6.3 percent in September.
Prime Minister Rishi Sunak Sunak pledged to halve inflation in 2023. It stood at just above 10 percent in January.
The drop to less than five percent in the consumer prices index could be one of the pledges he can say he comfortably achieved.
Economists have said the main reason inflation has fallen from its peak of 11.1 percent in October 2022 is due to fall in the energy price cap, which limits what suppliers can charge consumers per unit of energy.
Mr Sunak said: “Inflation works like a tax. It eats into the pound in your pocket, affecting the price of your food shop, your mortgage, the size of your pension pot. This is why halving inflation has been my number one priority.
“Getting it down has involved hard decisions and fiscal discipline. Official figures released this morning confirm we have halved inflation meeting the first of the five priorities I set out at the beginning of this year.
“But while it is welcome news that prices are no longer rising as quickly, we know many people are continuing to struggle, which is why we must stay the course to continue to get inflation all the way back down to two percent.”
The prime minister made inflation one of the five pledges by which the nation should judge his premiership.
Analysts said a sharp fall in the annual inflation rate could see finance minister Jeremy Hunt cut taxes in his latest budget announcement due next week.
Speaking on what this means for ordinary people, Liam Halligan, economist at GB News said: “It means prices aren’t going down but they are going up less quickly than they have in a couple of years.
“This also means interest rates have probably peaked. I doubt we’re going to get another interest rate rise now because of this dramatic reduction in inflation.
“It means mortgage rates are going to come down quite sharply. We’ve already seen that in the last couple of days as speculation about the figure has grown.”
The decline to 4.6 percent in the 12 months to October has been largely driven by a sharp drop in energy bills compared to last year – when the Government’s Energy Price Guarantee capped the typical bill at £2,500.
The Price Cap was introduced to protect households from soaring gas and electricity prices – and retreating food inflation amid easing industry pressures
Core CPI, which strips out the more volatile items such as food and energy, eased to 5.7 percent from 6.1 percent in September, with the latest fall helping to cement the view that interest rates may have peaked with no more rate rises to come anytime soon, experts have suggested.
