Inflation falls at record pace to 4.5%

Inflation tumbled at a record pace in October to 4.5 per cent, down from the 16-year peak of 5.2 per cent in September, official figures show.

A sharp fall in transport costs, coupled with lower fuel and food prices, helped to push down the Consumer Price Index to the lowest rate since July.

But core inflation, which excludes volatile energy and food prices, also fell from 2.2 per cent to 1.9 per cent, indicating that retailers are cutting prices in a bid to attract consumers into the shops during the recession.