UK inflation has dropped sharply to its lowest level in five years.

The figures were much better than experts had predicted as the impact of falling petrol prices helped the CPI measure nudge closer towards the 1 per cent mark.

The latest official statistics showed that Consumer Prices Index inflation tumbled from 1.5 per cent in August to 1.2 per cent in September, a welcome improvement on the 1.4 per cent expected by market analysts.

The Office for National Statistics (ONS) said a combination of falls in transport costs and recreational goods played a major part in driving down the headline figure.

This latest reduction also strengthens the case for the Bank of England’s Monetary Policy Committee to delay its decision to raise interest rates, with a rate hike before the end of 2014 now unlikely.

This latest inflation figure is the lowest recorded since September 2009, when it stood at 1.1 per cent.

The ONS warned that if it wasn’t for much lower food and petrol prices, inflation would be a third higher due to soaring gas and electricity bills.