Inflation remaining at 6.7% means things may have finally stopped getting worse.

This is still a long way from the government's commitment to half inflation by the end of the year – but it will doubtless claim this target was from an artificially high base, driven by energy costs. That may be so, but inflation remains three times the target rate and is driving above-inflation pay increases.

The UK economy is still ailing and one of the worst-performing industrialised economies. The UK's 6.7% looks particularly high when compared to a eurozone rate of 4.3%.

Food price inflation dropped again in September to 12%. This is good news, but it still begs the question as to why the fall has not been more rapid. Food price inflation accounts for around 40% of the overall rate, with energy being the other big driver. Food price inflation still looks far out of step with what is happening in European and global markets.

The latest drop, modest as it is, was led by milk, butter, cheese, and eggs and that will come as no surprise to farmers. They have already suffered price cuts with more to come, but that is not being fed through to consumers.

It is still hard to believe that in the debate around inflation, no politician is leaping to the side of consumers to ask why prices are so far out of step with market realities. Once again the UK is the sick man of Europe, with a rate well above the eurozone or individual member states. It is even more out of step with the United States, where food and overall inflation rates are back to manageable levels.

Inflation and what is happening to farm gate prices set the background for the European Commission's latest short-term agricultural markets report. This paints a picture of a European industry that struggled with extreme weather conditions and their impact on costs and yields. These ranged from a cold, wet spring, through a summer that brought a bizarre mix of extreme heat, droughts, and floods.

This highlighted the reality of global warming for agriculture. The EU says 2023, more than most years, tested the resilience of farmers. This has been reflected in positive comments from senior figures praising farmer resilience and the fact that thanks to farmers food security was never under threat. That is a view the UK government should reflect, but there are no signs of that in the government or opposition parties at Westminster.

Other positives for the EU were a reduction in input costs – fuel and fertiliser – which it says has allowed European farmers to improve their competitive position and underpin the EU's position as the world's biggest food exporter. The report makes clear that high-priced products were the big victims of the food price inflation squeeze, with wine and meat prime losers from the switch to cheaper products.

The pressure dairy farmers are under is clear and this is reflected in the EU markets report. There is relief that milk output has remained static this year, partly because of high input costs. The report says that while input costs have fallen the gain was more than wiped out by lower prices for milk at the farm gate. It says cheese remains the growth area, but warns that the EU has become more dependent on European markets, thanks to a massive slowdown in exports.

This is down to Chinese demand falling, with buyers reluctant to hold stocks on what they see as a falling market driven by southern hemisphere milk availability. It also warns of the impact in Europe of a small, but growing trend, particularly with younger consumers, to move away from livestock products to plant-based alternatives.

Cereal production in the EU ended up 4.3% below the five-year average, but oilseed production surged. The EU remains a net cereal exporter. On meat, the picture is gloomy, other than for poultry.

It has faced price resistance in an era of inflation and the longer-term impact of a move away from meat eating. Beef consumption is down 3.5% and pigmeat 5%, with poultry picking up much of that spending to remain the cheapest protein source for consumers.

Sheep production declined across Europe, on the back of disease problems in southern Europe and poor grass availability because of weather.