The rate of inflation has dropped to below 10% for the first time in eight months, with it going down to 8.7% last month.

The Office for National Statistics (ONS) said that Consumer Prices Index (CPI) inflation fell to 8.7% in April, down from 10.1% in March, as last year’s energy price hikes were not repeated.

However, the drop was still not as much as expected by economists, as it was thought it may go down to 8.2%.

ONS chief economist Grant Fitzner said: “The rate of inflation fell notably as the large energy price rises seen last year were not repeated this April, but was offset partially by increases in the cost of second-hand cars and cigarettes.

Midweek Herald: Overall costs in day-to-day life kept inflation at a slightly higher rate than expectedOverall costs in day-to-day life kept inflation at a slightly higher rate than expected (Image: PA)

“However, prices in general remain substantially higher than they were this time last year, with annual food price inflation near historic highs.”

What will inflation dropping mean for me?

While the annual inflation rate has eased, there is no great relief in the squeeze on family budgets because earnings continue to lag behind the pace of price rises, Sky News reports.

Chancellor Jeremy Hunt said: “Although it is positive that it is now in single digits, food prices are still rising too fast.

“So as well as helping families with around £3,000 of cost-of-living support this year and last, we must stick resolutely to the plan to get inflation down.”

Midweek Herald: The cost of food is still a big concern for economistsThe cost of food is still a big concern for economists (Image: PA)

Additionally, the Bank of England is worried about stubborn core inflation, which strips out volatile elements such as fuel and food.

That core rate of inflation rose to 6.8% last month, the highest since 1992 and up from 6.2% in March.

High interest rates have been raised tackle inflation, as those higher interest rates make it more expensive for people to borrow money so people are encouraged to save.

Therefore, it means people tend to spend less.

The Bank of England adds: "If people spend less on goods and services overall, the prices of those things tend to rise more slowly. Slower price rises mean a lower rate of inflation."

The target level of inflation is 2%, and economists predict it will ease further as the year progresses.