The decline is lower than forecast as economists had predicted it to be around 1.9%.

Last month, inflation remained at 2.2% after it went up by 0.2% in July.

The largest downward contribution came from transport, with larger negative contributions from air fares and motor fuels while the largest offsetting upward contribution came from food and non-alcoholic beverages.

The latest data also shows that services inflation, a key measure that the Monetary Policy Committee (MPC) is looking for before further rate cuts, fell from 5.6% to 4.9%.

The Bank has long said it wants to see services and wage growth fall below 5% before it embarks on a sustained period of rate cuts.

Based on forecasts before today’s figures were released, markets expected the Bank’s rate-setting MPC to cut the base rate by 0.25% to 4.75% at its 7 November meeting.

This would be the central bank’s second rate cut this year after it lowered rates in August, its first reduction in four years.

John Charcol mortgage technical manager Nick Mendes says: “This means that inflation is now below the Bank of England’s 2% target, paving the way for an interest rate cut next month, and potentially another in December.”

“While this decline is encouraging, there are still uncertainties surrounding the upcoming budget, and today’s announcement is unlikely to lead to an immediate drop in swap rates or significant shifts in headline best-buy mortgage rates, following recent repricing from lenders such as NatWest and Santander.”

“In the coming weeks, following the budget, attention will turn to the Bank of England’s Monetary Policy Committee (MPC) meeting and the governor’s notes on the 7th of November. These will provide critical insights into the Committee’s views and the potential trajectory of future interest rate decisions.”

L&C Mortgages associate director David Hollingworth says: “The sharper fall in the rate of inflation than had been expected could bring some welcome relief for mortgage borrowers.  The market expectation for interest rates has built in another cut this year but has been slightly less optimistic about whether rates will now fall as quickly, as had been forecast over the summer.”

“As a result, the recent cycle of cuts to fixed mortgage rates has been juddering to a stop and in some cases going into reverse, as an increasing number of lenders have increased rates.  If the better-than-expected inflation figures improve the market outlook for interest rates, it could therefore help to steady mortgage rates.”

“It’s widely anticipated that we will see the second cut to base rate come in November, so that is already factored into mortgage rates.  We’ll therefore have to see if today’s positive figures can build greater confidence in further cuts coming sooner but the upcoming Budget may leave some ongoing uncertainty to contend with.”

AJ Bell head of financial analysis Danni Hewson explains: “Today’s number sets up a rare cut at next month’s Bank of England MPC meeting. Core inflation and service inflation have both cooled considerably and the cost of raw materials has fallen back again.”

“A quarter percentage point cut is pretty much nailed on, and expectation of a second rate cut in December has also jumped up today with markets thinking there’s a better than 80% chance we will end the year with rates down at 4.5%.”

“Though there are no guarantees. There will be nine individuals carefully considering every scrap of data and poised to change their minds depending on what the chancellor pulls from her hat in two weeks’ time.”

“One concern is consumer confidence. With inflation way down and interest rates falling, why are people feeling so nervous about their finances? The answer might be found in the Budget and the commentary around it.”