​Falling petrol prices driving inflation drop


A reduction in the price of fuel across the UK in recent months has been linked to an overall drop in inflation.

The Office for National Statistics (ONS) has today published data that shows a drop in inflation of 0.5 per cent to 2.2 per cent in October 2013.

The figure is significantly lower than the 2.5 per cent it was widely tipped to fall to, which itself represented a drop from September's 2.7 per cent figure.

The recent easing of petrol prices is reckoned to have been a major contributing factor.

A price war between the major supermarkets earlier this year has seen the UK's average petrol price experience its largest fall since November 2008.

Asda recently announced a national fuel price cap, saying that its customers would have to pay no more than 126.7p for a litre of unleaded, or 133.7p per litre of diesel.

Sainsbury's, meanwhile, said it would slash prices by up to 3p per litre – its lowest for two and a half years – while Tesco said it would bring in price reductions of up to 2p.

Morrisons claimed that it would match Tesco's cuts at the majority of its sites.

In its October fuel price report, the AA said that the average price of unleaded fuel had dropped from 137.6p per litre to 132.2p over the course of the month.

The average diesel price also fell, but only by 3.4p per litre, to 139.1.

The fuel price reductions also led to a 1.5 per cent drop in the overall cost of transport month-on-month, according to the ONS.