Economists expected a smaller fall, to 1.9%, with the drop following four successive months of the consumer price index running, at or slightly above, the Bank of England's 2%
target.
target.
The main contributors to lower prices were games, toys and hobbies, clothing, and fares for sea travel, according to the Office for National Statistics.
However, both the games and clothing categories are volatile, said Andrew Wishart, UK economist at Capital Economics. The latter was likely pulled down by "unusually wet weather [keeping] shoppers away from the high street", he added, while the former is "affected by the prices of games in the best-seller charts and is likely to rebound".
Adrian Lowcock, head of personal investing at investment platform Willis Owen, noted that the inflation figures in general "can be very volatile", adding that "if the recent spike in the oil price persists we could see inflation return in the near future".
While admitting the oil price spike could be a one-off, Thomas Wells, manager of the Smith & Williamson Global Inflation-Linked Bond fund, agreed with Lowcock.
"If the attacks continue, a weak pound and higher oil price could become a toxic combination for the UK, especially if that happens to coincide with slower GDP growth," he said.
However, Wishart is more circumspect on that front. He estimates if the rise in the oil price to $65, from $60, is sustained, it would add just 0.1 percentage points to inflation at the end of the year. However, Wishart continued: "We suspect Saudi oil output will quickly recover causing oil to return to $60 by year-end."
Both Wishart and Wells expect inflation to pick up slightly moving forward, with Capital Economics forecasting the figure to stay around 2% until the end of the year.
One risk to that view, said Wishart, was that string wage growth looks to be failing to feed through to prices. That is borne out by the fall in services inflation to 2.2%, from 2.5%, he explained. "At the margin, this might allow the Monetary Policy Committee to strike a more dovish tone at tomorrow's meeting," he added.
The MPC will meet to discuss interest rates on Thursday (19 September), with Brexit and the slowdown in global growth continuing to remain the dominant factors in their thinking, according to Tom Rosser, investment research analyst at The Share Centre.
Phil Smeaton, chief investment officer at Sanlam UK, continued: "The recent contraction in GDP could gift Prime Minister [Boris] Johnson a pause in inflation which empowers him to launch a post-Brexit fiscal stimulus.
"In this sense the longer-term outlook for inflation remains well supported, and the UK economy remains poised to accelerate when political certainty is delivered."
By: David Brenchley (Investment Week).
Photo: Daily Express, UK.
Review: FlagMarkets.