Inflation Hits Three-Year Low: A Temporary Relief?

In September, British consumer price inflation fell to 1.7%, the lowest in three years, influenced by volatile components. Bank of England's Megan Greene highlighted this change and its potential effect on the impending vote. The services inflation rate also decreased significantly during this period.

British consumer price inflation took a surprising dip in September, reaching a three-year low at 1.7%, according to data released on Tuesday. This decline was largely influenced by more volatile components, as noted by Bank of England rate-setter Megan Greene.

The unexpected drop from August's 2.2% inflation rate fell below economists' forecasts as per a Reuters poll. Particularly, the services component saw a sharp fall, dropping from 5.6% to 4.9%.

As the Bank of England prepares for a vote next month, Greene commented on how these shifts in inflation could sway monetary policy decisions.

(With inputs from agencies.)