State pension to rise by £473 for millions as UK inflation rate for September falls to three year low
THE UK's rate of inflation has fallen below the Bank of England's target for the first time in three years.
The Office for National Statistics (ONS) said the Consumer Price Index (CPI) measured 1.7% in the 12 months to September.
It comes after inflation rose by 2.2% in the 12 months to August, unchanged from July.
Inflation is a measure of how much the prices of everyday goods such as food and clothes, and services such as train tickets and haircuts, have increased compared to a year earlier.
It's important to note that when inflation drops it doesn't mean that prices have stopped rising, it just means they are doing so at a slower pace.
Grant Fitzner, chief economist at the ONS, said lower air fares and petrol prices were the biggest driver for this months fall.
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The reading has also increased the likely hood that that the Bank of England will cut the base rate again when it meets on November 7.
The Bank of England has a target of keeping inflation at 2%.
Today's reading marks the first time in three years that inflation has fallen below the central bank's target.
The figures also further suggest that the state pension is now expected to rise from £11,502.40 to £11,975 per year - a £473 boost.
That's because of the triple lock system, which sees the state pension rise in line with whatever is highest out of: wages for May to July, 2.5% or September's inflation figures.
Revised statistics being released on Tuesday revealed that growth in employees' average total pay was 4.1% in the three months to July - not 4%.
Today's inflation figures do not outpace this.
Today's inflation figures also mean that those on benefits will also see their support increase by 1.7% in April.
This is because of "uprating" and payments usually increase in line with the previous September’s inflation figure.
It will be a significantly lower boost than what was seen in previous years.
The reading has also increased the likely hood that that the Bank of England will cut the base rate again when it meets on November 7.