UK inflation fell below the 2 percent target and also hit the lowest in more than three years in September, piling pressure on the Bank of England to ease policy at the November meeting.
Consumer price inflation weakened more-than-expected to 1.7 percent in September from 2.2 percent in August, the Office for National Statistics reported Wednesday.
This was the lowest since April 2021. Prices were forecast to climb 1.9 percent.
The fall was underpinned by lower air fares and petrol prices. Meanwhile, food and non-alcoholic beverages prices provided the largest upward contribution.
On a monthly basis, the consumer price index remained flat after rising 0.3 percent in the prior month. Economists had expected a 0.2 percent increase.
Core inflation that excludes prices of energy, food, alcohol and tobacco, softened to 3.2 percent from 3.6 percent in the previous month. The core rate also remained below forecast of 3.4 percent.
Data showed that services inflation eased notably to 4.9 percent from 5.6 percent. At the same time, goods prices slid 1.4 percent.
ING economists said the data is unequivocally dovish for the BoE and paves the way for rate cuts at the two remaining meetings this year.
The BoE had maintained its benchmark rate at 5.00 percent at the September meeting after lowering it by a quarter-point in August, which was the first reduction since 2020. The next policy announcement is due on November 7.
Another report from the ONS showed that output prices declined for the first time in eight months in September. Output prices dropped 0.7 percent annually, reversing a 0.3 percent rise in August. Economists had forecast prices to fall 0.6 percent.
On a monthly basis, the decline in output prices deepened to 0.5 percent from 0.3 percent in the prior month. Prices were expected to fall again by 0.3 percent.
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