UK inflation surprise opens up wriggle room for lower rates and less painful budget

Fall means interest rates could be cut faster than previously thought and is welcome news for Rachel Reeves

• UK inflation falls below 2% for first time since 2021
• Surprise fall in UK inflation badly timed for benefit recipients

At a glance, last month's sharp drop in the headline inflation figure to 1.7% tells the Bank of England all it needs to know when it considers whether to cut interest rates next month.

The plunge from 2.2% in August puts the rate of prices growth well below the central bank's 2% target and back in territory that we last saw in early 2021 - long before the Russian invasion of Ukraine sent energy prices rocketing.