Inflation has fallen to its lowest level in three years in a boost for Rachel Reeves ahead of the Budget.

The consumer prices index fell to 1.7pc in September, according to the Office for National Statistics (ONS), which was the first time it has been below the Bank of England’s 2pc target since April 2021.

The drop in inflation was below economists’ estimates of a fall to 1.9pc and compares with rates of 2.2pc in July and August.

The decline in the pace of price rises will be welcome news for the Chancellor as she prepares to announce a raft of tax rises on October 30.

Lower inflation eases pressure on the public finances as it lowers borrowing costs linked to government bonds and tempers the cost of living for households. 

It also raises pressure on the Bank of England to cut interest rates from the current level of 5pc to keep inflation at its target level.

Read the latest updates below.