Output price inflation continued its decline in October, dropping to 6.8 per cent, as lowered petrol and crude oil prices influenced the market, according to the Office for National Statistics.
The statistic represents a one per cent fall on September’s figures, constituting the biggest month-on-month drop since records began 22 years ago. Input price inflation was down by almost half – 13.8 per cent in October compared with 24 per cent the month before.
The figures have led analysts to call for even further reductions to the Bank of England base rate.
Capital Economics’ Paul Dales said: “Overall, with price pressures fading this rapidly, there is nothing to stop the MPC from slashing interest rates all the way to 1% or so.”
In further ONS figures released today, overall manufacturing output decreased by 1.3 per cent in Q3 of this year. The biggest sub-sectors to suffer were ‘electrical and optical equipment’ (down 2.6 per cent), ‘transport equipment’ (down 2.3 per cent) and ‘paper, printing and publishing’ (down 1.7 per cent).