Inflation down sharply as fuel prices steady

INFLATION fell sharply last month, down 0.5% to 2.2%, according to official figures.

The Office for National Statistics said the largest contributions to the fall in the Consumer Prices Index rate came from transport, mainly petrol prices, and tuition fees.

The Retail Prices Index grew by 2.6%, down from 3.2% in September.

Transport prices, overall, fell by 1.5% between September and October 2013 compared with a smaller fall of 0.1% between the same two months in 2012. Within the transport sector, the main downward contribution came from prices for motor fuels with reports of price cuts at many of the major supermarket chains on the back of decreases in wholesale prices.

Petrol prices fell by 4.9p per litre between September and October this year compared with a fall of 0.9p per litre between the same two months a year ago, to stand at 131.6p.

Diesel prices fell by 2.9p per litre between September and October this year compared with a fall of 0.6p per litre between the same two months a year ago, to stand at 139.0p.

There were also notable downward contributions from air fares and prices for second hand cars.

Education prices, overall, rose by 8.2% between September and October 2013, compared with a rise of 19.1% between the same two months in 2012. The downward contribution came principally from UK and EU student tuition fees, where the impact on the CPI of the rise in the cap for tuition fees introduced last year for new UK and EU students in England was smaller this year than in 2012.

The smaller impact was due to the fact that many students were already paying the higher rate of fees. In addition there were more modest price increases for part-time and postgraduate fees compared to last year.

The data will please the government as the rate is now falling back towards its preferred target of 2%.