Huge falls in the price of key food ingredients have driven the biggest slowdown in factory gate inflation since 1974.

Sharp rises in agricultural commodities drove food price inflation in the past year, but prices are continuing to fall back. Durum wheat, used to make pasta, fell 16.6% last week, and is now more than 30% cheaper than a year ago. Other key grains such as wheat, oats and rye are down 27%, 34% and 31% on last year. Oil also continued to fall, hitting under $55 a barrel this week, the lowest for two years.

These falling prices meant the official factory gate price index fell sharply month-on-month. The price factories paid for their raw materials in October fell 5.6% compared with September, driven mainly by plunging oil prices.

But in a healthy sign for supplier profitability, food output prices were down just 0.4% month-on-month.