Inflation for the year to October has fallen to 4.6 per cent.

That’s a big fall from 6.7 per cent in September and well below the Prime Minister’s much-publicised target of 5.0 per cent by the end of the year.

The change is down to easing petrol prices, the cut in the energy price cap, and lower food inflation.

So is that good news for interest rates?

Not necessarily says Sarah Coles, head of personal finance at business consultancy Hargreaves Lansdown, who comments: “Huw Pill, chief economist of the Bank of England, has been keen to emphasise that he thinks current rates will do the job of controlling inflation. 

“Meanwhile, Governor Andrew Bailey has said that it’s too early to talk about cuts. It means there’s every chance that even if inflation drops as forecast, interest rates will stay put for the foreseeable future.”

Coles continues: “There are no guarantees. If oil prices spike again, or wage rises steam ahead far more dramatically, we could see another rate rise whisked out of the back pocket. Meanwhile, if the economy is even weaker than expected, it could accelerate plans for cuts.

“However, if cuts progress as the Bank expects, they’re going to move at glacial pace. 

“The Bank of England expects them to be at 5.1 per cent in the last three months of next year and 4.2 per cent by the same period of 2026 – which is hardly a dramatic overnight shift.”