INFLATION fell to a five-year low of 1.2 per cent in September as the supermarket price war and lower petrol prices kept a lid on the rise in the cost of living.
The Consumer Price Index (CPI) measure of inflation dropped more sharply than expected from 1.5 per cent the month before, the Office for National Statistics (ONS) said.
Food and non-alcoholic beverages fell by 1.4 per cent year-on-year, the steepest drop since June 2002 and the fifth month in a row that they have not risen on an annual basis.
It is the longest sustained period of flat or falling food prices since the end of 2004.
The pound fell sharply today as the sharper-than-expected inflation drop meant it was less likely that the Bank of England will need to take action soon to raise interest rates from their five-year low of 0.5 per cent.
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