UK inflation tumbles to lowest level in five years

UK CPI inflation has fallen to its lowest level in five years, undershooting estimates as the impact of falling petrol prices dragged the headline level down near to 1%.

The release from the Office for National Statistics (ONS) revealed Consumer Prices Index (CPI) inflation fell from 1.5% in August to 1.2% in September, well below the dip to 1.4% which was expected. The ONS said a combination of falls in transport costs (notably sea and air fares) and prices for a range of recreational goods helped drive down the headline figure sharply. This latest drop also bolsters the case for the Bank of England's Monetary Policy Committee to hold off on raising interest rates, appearing to take any 2014 hike off the table once and for all. September's figure ...