The CPI including owner occupiers' housing costs (CPIH) also sank to 4.7% in the 12 months to October 2023, down from 6.3% in September.

This is the lowest CPIH level since November 2021.

According to ONS, the largest downward contribution to the monthly change in both CPIH and CPI annual rates came from housing and household services, where the annual rate for CPI was the lowest since records began in January 1950.

Industry experts react to latest ONS inflation

Adam Oldfield, chief revenue officer at Phoebus Software:

“Bringing inflation down was the intent from the Bank of England when it first started increasing the bank base rate and we are, at last, getting to see the impact.

“Today’s headline figure will no doubt be one that gives a level of confidence to many.”

Andrew Gething, managing director at MorganAsh: 

“While the government will be happy to have met its end of year target to halve inflation, we mustn’t lose sight of the fact that we are still a way off from the illusive 2% target.

“There’s no question that pressures remain, particularly for the most vulnerable of households.

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“We must also consider the increased burden for those still set to remortgage in the near future onto a much higher rate.”

Ranald Mitchell, director at Charwin Private Clients: 

"This significant drop in inflation will come as a huge relief to everyone and we should now expect further mortgage rate cuts in the days to come.

“Mortgage lenders were already at war with each other on pricing and these inflation figures will only encourage them to go even further, and quicker.

“It looks like the property market will reignite in 2024."

Claire Trachet, CEO and founder of Trachet: 

“Sharply decreasing inflation, coupled with a second consecutive interest rate hold shows a steadying of the ship after what has been a volatile economic period for the UK’s investment ecosystem.

“Inflation's complex influence on everything from the cost of capital to asset valuations has been causing companies with limited cash reserves to find it increasingly difficult to secure funding. 

“As the challenges of inflation are met with readiness and adaptation, optionality in deal-making is likely to increase in the immediate future.”

Richard Harrison, head of mortgages at Atom Bank:

“The last year has obviously been very challenging for the property market but, with the Bank of England now holding Base Rate for two consecutive months, this morning’s inflation news and the continued improvement in mortgage deals on offer, we should see buyer confidence slowly improve.”