Inflation dips to lowest level in three years after fall in petrol and diesel prices

PETROL and diesel prices falling an average ten per cent have seen inflation dip to the lowest level in three years.

Official figures yesterday showed consumer price inflation fell to 1.7 per cent in September — down from 2.2 per cent in August.

That is below the Bank of England’s two per cent target, lower than forecasts and way down on the 11 per cent rate in October 2022.

Myron Jobson, analyst at Interactive Investor, said: “The pace of price rises hasn’t been this low since the days of Covid lockdowns.”

The drop boosted money markets’ predictions of interest rate cuts next month — which would be a big help for businesses, borrowers and mortgage holders.

Markets have put a 91 per cent likelihood of the Bank lowering rates from five per cent to 4.75 per cent at its meeting in November.

Some economists highlighted Governor Andrew Bailey’s recent comments that the Bank could be more “aggressive” and suggested a cut to 4.5 per cent.

However the drop in inflation will deal a blow to millions of Brits on benefits.

Rises in universal credit, and disability living and carers allowance, are pegged to September’s figure.

It means the standard allowance of universal credit, for a single person under 25, is expected go up in April by just £5.30 a month to about £317.

For a couple over 25, the rise is likely to be £10.50 to £628 a month.

Danni Hewson, at investment platform AJ Bell, said: “Last year the standard allowance for a couple over the age of 25 jumped by almost £40 a month.”

The City is still nervous, with inflation set to rise above two per cent in October due to higher energy bills following the regulator raising its price cap.

And there are fears fuel duty will rise in the Budget, despite The Sun’s decade-long Keep It Down campaign.

SLAP OF LUXURY

THE fizz has gone flat at Louis Vuitton Moet Hennessy after around £10billion was knocked off its value yesterday amid slowing demand for luxury goods.

LVMH, which has called on Game of Thrones actress Sophie Turner to be the latest face of Louis Vuitton handbags, recorded a 5 per cent slip in fashion and leather goods, the first fall since the start of the pandemic.

Shares in LVMH fell as much as 7 per cent, closing down 4.5 per cent, valuing the business at £250billion.

Champagne sales fell, knocking sales in its wine and spirits division by 8 per cent.

LVMH is counting on Beyonce’s new whisky brand, SirDavis, for an uplift.

LVMH said sales in Asia fell by 16 per cent in the past three months

FIRMS’ TAX FEAR

SHOPS, pubs and restaurants face a £2.63billion “double whammy” hit from business rates rises, unless the Chancellor makes good on reforms.

Business rate bills are based on September’s inflation figures.

Research by property firm Altus Group forecasts the 1.7 per cent inflation rate announced yesterday means business rates will jump by £488million in England.

Some £224million will be paid by retail, hospitality and leisure.

Small firms also face the loss of the last government’s 75 per cent rates discount.

JUST EAT’S SWELL

TAKEAWAY delivery firm Just Eat has posted a 6 per cent rise in sales to £1.5billion in the UK and Ireland.

The firm yesterday said a 1 per cent drop in food orders was offset by higher menu prices, bringing its best UK sales in three years.

The company recently launched a tie-up with adult retailer Lovehoney and is focusing on partnerships with retailers including Boots and Lush.

Just Eat’s US sales slumped by 12 per cent.

Boss Jitse Groen said the UK continued with “positive momentum”.

CALL FOR BRAKE ON CARS BAN

THE boss of Vertu Motors car dealership group has called on the government to delay its 2030 net zero deadline.

It comes amid manufacturers now rationing petrol and diesel motors to avoid fines if they sell too many this year.

Vertu’s Robert Forrester said some drivers buying a car this winter may have to wait for new year when next quotas kick in.

Manufacturers have to ensure 22 per cent of all the vehicles sold this year are electric, or face a £15,000 fine for every car over the limit.

Vertu posted a 3 per cent rise in half year sales to £2.5billion.

Profits slumped by 27 per cent to £22million following minimum wage increases.

Mr Forrester also took aim at the Chancellor’s proposed tax changes amid warnings it could destroy London’s junior Aim stock market, where Vertu launched in 2006.

He said he would “urge the Government to carefully consider the impact”.

INN’S JOB VACUUM

PREMIER INN is turning to robot vacuum cleaners at its hotels to reduce human staff.

Boss of parent company Whitbread, Dominic Paul, did not rule out more redundancies as he ramps up cost cutting by £20million to £60million.

Whitbread has already axed 1,000 jobs in a year.

The group posted a 22 per cent tumble in half year pre-tax profits to £309million.

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