UK inflation was unchanged at 2.4% in October after a rise in the cost of petrol and utility bills was offset by falling food prices.
City economists had predicted an increase to 2.5% but a price war on the high street, especially among food retailers, drove down the cost of the weekly shop and held back consumer inflation.
The Office for National Statistics said transport costs – particularly fuel – were the biggest factor pushing up the cost of living.
Gas and electricity prices, which tend to track the cost of crude oil, also rose in October compared with the previous month.
Analysts said the pause in the downward path of the consumer prices index (CPI) reflected the ups and downs of the pound over the past year as traders waited for the outcome of Brexit talks. A further fall in the pound would increase the cost of imports and push inflation back towards highs seen in 2017, when the November figure reached 3.1%.
Laith Khalaf, a senior analyst at the stockbroker Hargreaves Lansdown, said: “Brexit is still the elephant in the room when it comes to the future path of inflation, and consequently of monetary policy.
“That’s because the pound now waxes and wanes with the Brexit negotiations and that has a big impact on how much UK consumers pay for imported goods.
“What the market sees as a positive Brexit deal will deliver a higher pound and lower inflation.”
Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, said a fall in food inflation to 0.9% in October from 1.5% in September was a surprise and was unlikely to continue into November.
“Nonetheless, CPI inflation should remain on a downward trend over the coming months, reaching 2.0% at some point in the first quarter of 2019 because retailers have largely finished passing on higher import prices to consumers,” he said.
He said utility bills went up on average after the rise in prices by two large energy suppliers and the government increased its safeguard tariff, which applies to 5m households who have prepayment meters or receive the warm home discount.
However, a cap on bills and falls in crude oil prices, which have pushed down the cost of Brent crude from $80 to $65 in only a month, should start to have an effect, he added.
The TUC said inflation was still eating up most of the nation’s pay rises after figures for September showed wages increasing at 3.1% on a year ago.
