Shoppers pass along the main high street in Whitstable, UK.
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LONDON — U.K. inflation fell sharply in October to 4.6% from 6.7% the previous month, hitting a two-year low.
The headline consumer price index was flat on a monthly basis. Economists polled by Reuters had expected the headline CPI to rise by 4.8% year-on-year and 0.1% from the previous month.
Core CPI — which excludes volatile food, energy, alcohol and tobacco prices — fell to an annual 5.7% in October from 6.1% in September.
The largest downward contribution came from housing and household services, the Office for National Statistics revealed, where the annual rate for CPI hit the lowest since records began in January 1950.
Food and non-alcoholic beverages also contributed to the easing of inflation, with the annual rate falling to its lowest since June 2022.
The Bank of England earlier this month left its benchmark interest rate unchanged at 5.25% after ending a run of 14 straight hikes in September, as policymakers looked to wrestle inflation back down towards the Bank’s 2% target.
The drop will be welcome news for Downing Street after Prime Minister Rishi Sunak committed to halving U.K. inflation back in January, when the annual CPI rate was running above 10%.