Inflation falls to lower than expected 2.4%

Inflation fell to a lower than expected 2.4% in September, according to figures from the Office for National Statistics.

The Consumer Prices Index (CPI) measure of inflation slipped from 2.7% in August, with slightly falling prices of food and drink - notably for meat and chocolate - the main reason for the decline.

In addition, clothing price rises were weaker than at the same time last year and, while drivers saw increases in petrol costs these were more subdued than in September 2017.

Energy price rises partly offset the downward pressure on the CPI figure.

It comes a day after official figures showed wages growing at a pace of 3.1% over the summer months - the strongest rate in nearly a decade.

The pound slipped close to $1.31 against the US dollar on the inflation figure, which was the lowest since June and below economists' expectations for an inflation rate of 2.6%.

September's CPI figures have an added significance because they are used by the Government in its calculation of state pension and business rate increases for the following year.

The so-called "triple lock" protecting the value of the state pension means that the increase is likely to be 2.6%, reflecting earnings growth earlier in the year.

The triple lock guarantees that the pension goes up by 2.5%, or September's CPI rate, or earnings - whichever is higher.

Meanwhile the British Retail Consortium said the inflation figure would mean a £180m rise in the business rates bill faced by struggling retailers.

Inflation has now eased back after topping 3% at the end of last year - its highest rate since 2012. That should ease any pressure on the Bank of England to raise interest rates further to try to keep a lid on prices.

Howard Archer, chief economic advisor to the EY ITEM Club, said: "The dip in inflation provides a further flip to consumer purchasing power following recent firmer earnings data."

But Ben Brettell, senior economist at stockbrokers Hargreaves Lansdown, said that despite the decrease there were signs of inflationary pressures building in the economy - thanks to the improvement in wages and the rise in oil prices.