Inflation rate falls to its lowest in three years

Inflation eased in September to its lowest annual rate in over three years, according to the latest figures from the Office for National Statistics.

While lower airfares and petrol prices were the biggest driver for this month’s fall, these were partially offset by increases for food and non-alcoholic drinks – the first time that food price inflation has strengthened since early last year.

The annual CPIH rate was +2.6%, down from +3.1% last month and the lowest since July 2021 (+2.1%).

The annual rate of alcoholic beverages and tobacco was +4.8%, down from +5.7% last month and the lowest since December 2022 (+3.8%).

Alcoholic beverages and tobaccos had small downward effects, where prices overall rose by 0.1% between August and September 2024, compared with a larger rise of 1.0% between the same months a year ago.

Within food and non-alcoholic beverages, prices rose by 1.8% in the year to September, up from 1.3% in August 2024. The annual rate of 1.8% is down from a recent high of 19.2% in March 2023, the highest annual rate seen for over 45 years.

There were upward contributions to the change in the annual rate of inflation between August and September 2024 in three of the 11 food and non-alcoholic beverage classes. These contributions came from milk, cheese and eggs; mineral waters, soft drinks and juices; and fruit.

The only class with a downward contribution was bread and cereals, while the other seven classes were little changed. There were, however, still a number of products that provided a notable downward contribution to the change in the annual rate, including cakes; cooked ham; frozen prawns; olive oil; potato crisps; and box of chocolates.