The decline comes after inflation held steady throughout July and August, after the government hit its 2% target in June of this year.

Meanwhile, CPIH increased by 2.6% in the 12 months to September 2024, down from 3.1% in August.

The largest downward contribution to the monthly change in both CPIH and CPI annual rates came from transport, with larger negative contributions from air fares and motor fuels.

The largest offsetting upward contribution came from food and non-alcoholic beverages.

Members of the specialist finance industry have given their say on the inflation reduction.

Paul Noble, CEO of Chetwood Bank:

“Inflation falling under 2% for the first time since April 2021 is welcome news for consumers.

“Not only does it allow for further respite from rising prices, but it also increases the likelihood that the Bank of England will cut the base rate again when it next meets on 7th November.

"If the base rate is cut next month, this will likely result in greater confidence and activity across the property market, with a reduced cost of borrowing increasing demand from prospective buyers.

“However, while these are important economic shifts, the other unknown is the exact contents of the chancellor's budget, which is being delivered on 30th October.

•   B&C Awards 2024: The Video
•   CPI holds at 2.2% as property sector has 'shown remarkable resilience in recent months'
•   BoE 5% interest rate hold 'reflects ongoing caution' but 'a prudent move'

“What we can say is that, with the macroeconomic climate changing and a raft of new policies expected in the budget, it will be important for consumers and investors to take stock of their finances over the coming months.

“As a bank, our responsibility is to support customers through this period, ensuring our products cater to people’s evolving needs and supporting borrowers and savers to act with confidence."

Richard Pike, chief sales and marketing officer at Phoebus:

 “All in all, it’s a promising outlook for a Bank of England rate cut in November also assisted by yesterday’s news on easing in wage growth.

We must still remember prices are still rising, just not as fast, and also usually benefit rates are assessed on September’s figures and so it will be interesting to see what the new Government does on this.

 “There’s still an expectation that inflation will start to rise again in the next three to six months.  However, with inflation well below the Bank of England’s target, the scene is set for potentially larger interest rate more quickly cuts than previously thought.

 “In balance, however, the economy is looking a lot more stable, and this can only stimulate the housing and mortgage markets in Q4 and into 2025.”