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STORY: British inflation dropped sharply in September.

Wednesday's data showed it fell to 1.7% last month - better than analyst forecasts.

That was down from 2.2% in August, and the lowest reading in three and half years.

British officials said the number was driven down by lower airfares and petrol prices.

Key price indicators watched by the Bank of England also fell.

Core inflation, which excludes energy, food, alcohol and tobacco, dropped to 3.2%, slightly down from August.

While services inflation sank to its lowest in two and half years at 4.9%, well down from August's reading.

It added to bets the central bank would cut rates next month.

Interest rate futures showed investors were putting a 90% chance on two quarter-point rate cuts by the end of this year.

Britain's finance ministry welcomed the fall in inflation.

It offers a helpful backdrop for Chancellor Rachel Reeves as she readies her first budget, due on October 30.

Reeves has struggled to find the extra money to invest in public services and new infrastructure without spooking investors.

Her spending plans will be watched closely by the Bank of England.