The FTSE 100 has climbed in trading this morning (October 16th), as fresh data shows inflation has dropped to a three-year nadir of 2.2 per cent in September.
Most experts believed official figures from the Office for National Statistics released today would see consumer price index (CPI) inflation slide to this level from August's 2.5 per cent.
Retail price inflation – which includes some housing and tax costs – also dropped to 2.6 per cent from 2.9 per cent.
Some thought the CPI figure would dip lower than the government's two per cent target, while there are fears the respite may be short-lived, as energy bills start to rise this autumn.
The Office for Budget Responsibility expected September's CPI to be 2.6 per cent and under that estimate the benefit bill for 2013 stood at £183 billion – therefore, this latest report is good news for the chancellor.
At 10:30 BST, the FTSE 100 was 0.5 per cent higher to an index value of 5835.3 points.
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