Record inflation fall to 4.5 per cent

Inflation tumbled at a record pace in October to 4.5 per cent, down from the 16-year peak of 5.2 per cent in September, official figures show. A sharp fall in transport costs, coupled with lower fuel and food prices, helped to push down the Consumer Price Index to the lowest rate since July. Core inflation, which excludes volatile energy and food prices, also fell, from 2.2 per cent to 1.9 per cent. The bigger-than-expected fall helps to explain the Bank of England’s dramatic 1.5 per cent rate cut earlier this month as, until now, the rate-setting Monetary Policy Committee has been concerned about entrenching inflation in the economy if it cuts rates too swiftly. Analysts say that the figure paves the way for more rate cuts.