It is easy to understand why today’s inflation numbers created quite the stir.

Annual UK consumer prices index inflation dropped from 6.7% in September to 4.6% last month.

The UK’s inflation numbers have, not at all surprisingly, been much more in the public eye in the last couple of years than at any other time over the previous couple of decades.

The Conservatives have tried to play up the global factors when it has come to inflation. However, the UK’s inflation woe has been particularly acute in an international context, fuelled by factors peculiar to the country, including Brexit and a failure by the UK Government to keep a lid on energy prices.

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Millions of households have been struggling under a grim cost-of-living crisis. And the setting of interest rates has become an increasingly contentious issue, with the Bank of England’s Monetary Policy Committee having raised UK base rates from a record low of 0.1% in December 2021 to 5.25%.

This is the backdrop against which the Office for National Statistics today unveiled what it noted is the biggest monthly fall in inflation since April 1992.

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It is undoubtedly a relief to see UK inflation falling.

And the drop fuelled hopes of cuts in benchmark UK interest rates as early as next year.

Janet Mui, head of market analysis at stockbroker RBC Brewin Dolphin, said: “Today’s data further strengthens the narrative of the end of the hiking cycle in the UK.”

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She added that markets were pricing in a reduction in base rates from June 2024.

That said, the fall in annual CPI inflation between September and in October was, overall, down to base-year effects, with the consumer prices index unchanged month-on-month. The index had risen by 2% between September and October 2022.

Martin Beck, chief economic advisor to the EY ITEM Club, observed: “With household energy bills rising by more than 20% between September and October 2022, but falling by close to 10% in the same period this year, a sizeable fall in inflation in October had been on the cards.”

And it is important to realise, especially given all the political messaging around inflation, that the price increases we have seen already are baked in.

At 4.6%, annual CPI inflation is more than two times the target set for the Bank of England by the Treasury.

Prices are not falling. In fact, they are still rising at a very sharp rate by historical standards.