Inflation falls to three year low as energy prices fall

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UK inflation rose at its lowest pace in almost three years last month as the energy cap kept a lid on the price of electricity, gas and other fuels, according to official statistics.

The Office for National Statistics (ONS) said consumer prices rose 1.5% in October, against 1.7% in September.

Energy regulator Ofgem lowered price caps last month.

The slower pace of price rises could boost household spending as wages are rising faster than inflation.

ONS data released on Tuesday showed that average earnings, excluding bonuses, increased by 3.6%.

The October inflation number was lower than the 1.6% forecast by economists, although the Bank of England has said inflation could slip to 1.25% early next year – well below its 2% target.

A spokesperson for the ONS said: “A fall in utility prices due to a lowering of the energy price cap helped ease inflation in October. However, this was partially offset by rising clothing prices.”

Gas and electricity prices fell by 8.7% and 2.2% respectively in October from September.

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Ofgem said that around 15 million households on default deals or pre-payment meters will fall this winter as a result on its latest cap on prices which took effect from October.

The cap means that households should typically pay £75 less a year.

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