Clothes prices push inflation down

Britain's underlying inflation rate dropped back slightly last month to 2.8%, its lowest level since June and one which economists said may persuade the Bank of England to hold off raising interest rates.

The Office of National Statistics said the biggest downward effect on inflation was from clothing and footwear, particular women's outerwear, as prices did not increase as much as they did at the same time last year when new stock was introduced.

The decline in the impact of clothing and footwear offset an increase in seasonal food prices. This summer's heat-wave increased the cost of fresh vegetables which jumped 3.3% on the month to stand 8.3% higher than a year earlier.

The underlying inflation figure for September, which strips out mortgage interest payments, was last lower in January, although inflation still remains above the government's 2.5% target.

There was also little movement in the Harmonised Index of Consumer Prices which is used in the Eurozone and due to be adopted in the UK later this year. The figure, which does not include housing costs and smoothes out one-off effects, remained unchanged at 1.4%.

Today's data, which had been widely forecast by city analysts, means the underlying rate of inflation has now been above the government's target for 11 months in a row.