The Consumer Prices Index including owner occupiers' housing costs (CPIH) fell to 2.9% in the 12 months to September 2021, down from 3%, data from the Office for National Statistics shows.
Prices for goods and services from restaurants and hotels contributed to the lower inflation rate, reflecting the end of the Government's ‘eat-out-to help-out' food discount scheme.
Most other sectors made an upward contribution to the change in the inflation rate, as measured by the CPIH, however, including recreation and culture (0.31 percentage points), housing and household services (0.69 percentage points), and transport (0.91 percentage points).
The news is likely to come as good news for Chancellor Rishi Sunak, who announces his Autumn Budget next week.
Jack Leslie, senior economist at the Resolution Foundation, said:
"The big questions for policymakers now are just how temporary these price pressures will be, and whether they'll translate into stronger pay growth."
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