Consumer price inflation (CPI) was 1.5 per cent in October, down from 1.7 per cent the previous month, according to the Office for National Statistics (ONS).

It’s the third month in a row inflation has undershot the Bank of England target of 2 per cent.

“A fall in in utility prices due to a lowering of the energy price cap helped ease inflation in October. However, this was partially offset by rising clothing prices,” an ONS spokesperson said.

The energy regulator Ofgem lowered the price cap on 1 October cutting the average bill of a typical customer on a standard tariff by £75 a year.

The ONS said energy prices fell by 4.4 per cent between September and October.

Lower inflation will be welcome news for consumers after data published yesterday showed the pace of wage growth has started to slow.

Rupert Thompson, head of research at wealth manager Kingswood, said the latest figures could signal a potential interest rate cut.

“These numbers follow hard on the heels of the downbeat economic data released earlier in the week which showed a slowdown in underlying wage growth, a fall in employment and the weakest GDP growth since 2010.

“Altogether, this crop of data suggests any move by the Bank of England over coming months is more likely to be a rate cut than a hike. Even so, the most likely outcome remains that the Bank remains on hold – particularly now there are signs the worst of the global economic slowdown is behind us.”