Falls in food, alcohol, and clothing prices last month helped drive inflation to its lowest level in eight months in November.
The inflation rate fell to 3.2% from 3.6%, a larger fall than analysts expected.
Lower food prices were the main driver of the fall, “with decreases seen particularly for cakes, biscuits, and breakfast cereals”, according to Office for National Statistics chief economist Grant Fitzner.
It comes ahead of the Bank of England’s decision on interest rates on Thursday, with a cut widely expected.
The fall in inflation will foster hope that inflation has peaked, with this possibly paving the way for further interest rate cuts next year.
Other items which also pushed down inflation were the cost of tobacco, restaurant meals and hotel stays, furniture, and transport.
Prices are still rising on average across the economy, but there were decreases in some items between October and November.
Food prices, which were the biggest driver of the lower inflation figure, fell month on month – bucking a trend for normally rising at this time of the year.
Chancellor Rachel Reeves said she knew that families across Britain “will welcome this fall in inflation”.
“Getting bills down is my top priority. That is why I froze rail fares and prescription fees and cut £150 off average energy bills at the Budget this year,” she said.
Reacting to the inflation figure, chief UK economist with Capital Economics Paul Dales said it was “particularly good news” that the rate of price rises had been “dragged down by the fun things that we all want to indulge in around this time of year”.
He added that clothing and footwear prices could also rebound after Black Friday discounts drop away, but that the overall picture “shows that disinflation is happening faster than expected”.
