This was driven by lower fuel prices and base effects from an unusually strong September 2023. However, economists expect inflation to rebound in October as energy prices rise and base effects disappear.

Kevin Brown, savings specialist at Scottish Friendly, commented: “The news that inflation has fallen to its lowest level in three years to 1.7% is highly encouraging for hard-pressed households, particularly as it comes despite rising energy costs and the effects of the minimum wage. It suggests that price rises might be tamed in earnest.

“This data should provide much of the confirmation that the Monetary Policy Committee (MPC) needs to continue on its rate-cutting path and could even spur on a quicker succession of cuts, perhaps as early as next month.

Mr Brown continued: “Rate setters had forecast some short-term increases in inflation thanks to rising energy bills, but the reverse now seems to be true. There are still some stubborn elements to it, such as services inflation, but this seems to be coming down in earnest too (4.9% down from 5.6% in August).

“Setting the economy on a quicker path to lower rates is good news for households and businesses, as it should lead to lower borrowing costs. However, for savers, cash rates are deteriorating, leaving savings languishing. For longer-term planning, it is worth considering alternatives such as investments in order to give that money the best opportunity possible to grow.”