A steep fall in the rate of inflation surprised analysts on Tuesday and left the government facing tricky decisions over the annual uprating of the taxation and social security systems.

The rate of consumer price inflation fell to 1.1 per cent in September, down from 1.6 per cent in August, the Office for National Statistics reported, leaving its value just two-tenths of a percentage point above the level that would force the governor of the Bank of England to write a letter of explanation to the chancellor. The longer-standing retail prices index, used as the starting point for uprating benefits and tax thresholds, remained negative at -1.4 per cent.