UK cost of living increases dip in September

Price rises dipped slightly in September as the economy continued to reopen, according to official figures.

The increase in the cost of living, as measured by the Consumer Prices Index, fell to 3.1% in the year to September, down from 3.2% in August.

Higher prices for transport were the biggest contributor to price rises.

It comes after the Bank of England warned it "will have to act" over rising inflation, suggesting interest rates may rise soon.

The Office for National Statistics (ONS) said the inflation rate fell back slightly last month because higher prices in restaurants and cafes in August were largely down to comparisons with August of 2020, when the Eat Out to Help Out Scheme was running.

Under the scheme, diners got a state-backed 50% discount on meals up to £10 each on Mondays, Tuesdays and Wednesdays.

Mike Hardie, head of prices at the ONS, said: "However, this was partially offset by most other categories, including price rises for furniture and household goods and food prices falling more slowly than this time last year.

"The costs of goods produced by factories rose again, with metals and machinery showing a notable price rise. Road freight costs for UK businesses also continued to rise across the summer."