"UK inflation held steady at 3.8 per cent in September, confounding expectations of a rise and increasing the likelihood that the Bank of England could cut interest rates before the end of the year. The latest Office for National Statistics (ONS) data showed consumer price inflation (CPI) unchanged from August, and below the 4 per cent forecast by the Bank and City economists. The figures signal that the disinflationary trend may be regaining momentum, providing some relief to households and policymakers."
"Economists said the weaker-than-expected inflation reading could prompt the Monetary Policy Committee (MPC) to act sooner than markets anticipate. Martin Beck, chief economist at WPI Strategy, said: "A November move looks unlikely, but policymakers may be overestimating how long they can wait. Fiscal tightening in the Budget, combined with rising unemployment and slowing wage growth, points to a softening economy. A forward-looking central bank should recognise that the disinflationary forces are building.""
Consumer price inflation in the UK was unchanged at 3.8 per cent in September, below the 4 per cent forecast. Food price inflation fell from 5.1 per cent to 4.5 per cent, the first decline in six months, while recreation and service cost increases slowed. Core inflation slipped from 3.6 per cent to 3.5 per cent, and services inflation held at 4.7 per cent, under the Bank's 5 per cent forecast. Upward pressure came from higher fuel prices and airfares, offset by easing hospitality and retail costs. Markets now price a likely rate reduction by December and further cuts into early 2026.
Read at Business Matters
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