Surprise fall in inflation paves way for interest rate cuts
Released On 16th Oct 2024
UK inflation fell unexpectedly to 1.7% in the year to September, the lowest rate in three-and-a-half years.
It means the annual rate prices are rising at is now below the Bank of England's 2% target, paving the way for further interest rate cuts.
Lower airfares and petrol prices were the main drivers behind the surprise slowdown, official figures showed, external.
Separately, September's inflation figure is also normally used to set by how much many benefits rise next April.
This includes the biggest: Universal Credit, which goes up at the government's discretion.
All the main disability benefits - personal independence payment, attendance allowance and disability living allowance - as well as carer’s allowance, go up by at least September's inflation rate by law.
But a rise of 1.7% for benefits would be less than April's expected rise in the state pension of 4.1%, which is determined by the so-called triple lock. The government has said it wants to shrink the UK's annual disability and incapacity benefits bill.
