by business editor Trevor Sturgess

The cost of living fell slightly last month (Oct), but it's "too soon to hang out the bunting."

Inflation, according to the Consumer Prices Index (CPI), dipped to 5% in October (from 5.25% in September) while the Retail Price Index (RPI) fell to 5.4% (from 5.6%).

Supermarket price wars reduced margins and lower fuel costs kept a lid on rising prices.

But William Hunter of Hunter Wealth Management warned that inflation was double what it should be and people's savings and nest eggs were still getting hammered.

"It's far too early for savers and pensioners - and people generally - to hang out the bunting," he said.

"If there's one trend in the current environment, it's the volatility of monthly figures.

"One month's rise can be followed by a fall - and vice versa. Given the volatility of the global and domestic economy, who knows what could happen to prices next?"

David Kern, chief economist at the British Chambers of Commerce (BCC), said the figures supported its view that inflation was "probably past its peak, and a sharp decline can be expected during the course of 2012."

Another expert warned that downward pressure on prices by aggressive supermarket discounting might prove unsustainable.