UK inflation unexpectedly fell to 1.7% in the year to September, the lowest level in three and a half years.
Official data showed that falling airfares and petrol prices were the main reasons for the unexpected slowdown.
This means inflation – the rise in interest rate prices over time – is now below the Bank of England’s 2% target, paving the way for further interest rate cuts next month.
September’s figures are usually used to determine how much benefits, such as Universal Credit, will increase next April.
This includes all the main disability benefits – Personal Independence Allowance, Attendance Allowance and Disability Living Allowance – as well as Carer’s Allowance.
The National Bureau of Statistics said motor fuel and lubricant prices fell significantly in September, down 10.4% compared with the same period last year.
The cost of air travel also weighs on inflation as post-summer sales lead to lower ticket prices.
However, households were hit by a surge in food and non-alcoholic beverage inflation, with milk, cheese, eggs and fruit seeing larger price increases.
Treasury Department Principal Secretary Darren Jones said the slowdown in price increases “will be welcome news to millions of households.”
“However, more needs to be done to protect working people, which is why we are focused on restoring growth and restoring economic stability to deliver on the promise of change,” he added.
