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British annual consumer price inflation fell for the first time in more than a year in October and at the fastest pace since the series began as fuel costs tumbled, official data showed today.

The Office for National Statistics said annual consumer price inflation dropped to 4.5 per cent in October from 5.2 per cent the previous month, taking it to its lowest level since July.

The sharper than expected fall validated the Bank of England's decision to slash interest rates by 150 basis points this month - its biggest cut since being made independent in 1997.

Analysts had forecast a more modest drop in inflation to 4.8 per cent. The biggest contributor to the fall was transport, which alone subtracted 0.5 percentage points from the annual rate.

Retail price inflation, on which many wage deals are based, fell to 4.2 per cent from 5 per cent in September.

The monthly deceleration in the annual rate was the biggest since January 1993.