In response to this data, Julian Jessop, economics fellow at think tank, the Institute of Economic Affairs, said although it was "disappointing", the BoE should "now be thinking about cutting interest rates, not raising them again".
He said: "The bigger than expected fall back in August means that inflation is still lower than the Bank had been forecasting. Economic growth has been weaker too.
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"A large drop is baked in for October. The reduction in the Ofgem cap on domestic energy bills will knock more than one percentage point off the headline rate this month.
"Above all, money and credit are now both shrinking, adding to the risks of recession and ensuring that inflation has a lot further to fall."
simoney.kyriakou@ft.com
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