A council finance lead has welcomed a drop in inflation while calling for “fairer” funding for local authorities.

Inflation dropped sharply in October to 4.6 per cent – down from 6.7 per cent the previous month and from 11.1 per cent in October 2022.

Windsor and Maidenhead’s council finance lead councillor Lynne Jones said: “We welcome the news of the reduction in the inflation rate. While this will have no immediate significant impact on the councils finances we anticipate that it will reduce contract costs going forward.”

Councillor Jones warned the borough’s cabinet in September that the authority is more than £200m in debt and stands at risk of having to issue a Section 114 notice.

This would effectively declare the authority bankrupt – although councillor Jones said at the time the council would do “everything we can” to avoid this.

Other local authorities to have taken this measure over the past few years include neighbouring Slough as well as Birmingham, Thurrock and Woking.

Inflation measures the rate at which the prices of goods and services is increasing – so a drop does not mean that prices are falling, only that they are increasing at a slower pace.

Prime Minister Rishi Sunak hailed the inflation as the fulfilment of one of his five pledges set in January.

However, Labour’s shadow chancellor Rachel Reeves claimed “working people are worse off” under the Conservatives, saying “now is not the time for Conservative ministers to be popping champagne corks.”

Chancellor Jeremy Hunt is expected to deliver the Autumn Statement on November 22, which will provide updates on the state of the economy.

Councillor Jones added: “In any spending review I would like to see fairer funding for local councils.

“There has been a significant reduction in funding over the last 10 years when compared with costs, this is most apparent in adults and children's social care and has resulted in funding being moved from non-statutory services to cover the shortfall.

“The impact of these funding decisions, combined with the cap on council tax, has made things extremely challenging to provide services that the residents and businesses expect.”

High inflation and growing adult social care demand have often been cited as among the key pressures facing local government finance.

"I would also like to see a multi-year finance settlement, to give councils the ability to budget for more than one year," councillor Jones added.