UK inflation unexpectedly remains at 3.8% for third month in a row

"UK inflation was unchanged last month at 3.8%, confounding expectations of a rise, in welcome news for the chancellor, Rachel Reeves, as she plans for her crucial budget next month. The Office for National Statistics (ONS) said that inflation measured on the consumer prices index remained at the same level in September as in August and July. City expectations had pointed to 4% reading but the ONS said upward pressure from transport prices was offset by cheaper food and a slowdown in inflation for recreation and culture, including live music tickets."

"It was the 12th month in a row CPI remained above the government's 2% target, however. The reading raised hopes that the Bank of England could cut interest rates sooner, with markets moving their bets for the first full quarter-point reduction from March to February next year after the data was released on Wednesday. Rising food prices, partly driven by climate-related factors, have been causing mounting concern, and policymakers are likely to welcome the fact that annual food price inflation eased to 4.5%, from 5.1% in August, the first time it has slowed since March."

"Reeves said: I am not satisfied with these numbers. For too long, our economy has felt stuck, with people feeling like they are putting in more and getting less out. That needs to change. All of us in government are responsible for supporting the Bank of England in bringing inflation down. Reeves said last week she would"

Consumer Prices Index inflation held steady at 3.8% in September, unchanged from August and July. Upward pressure from transport prices, particularly petrol and air fares, was offset by cheaper food and a slowdown in recreation and culture price growth. Annual food price inflation slowed to 4.5% from 5.1% in August, the first slowdown since March. Transport costs rose 3.8% year on year, up from 2.4% in August. CPI has remained above the government's 2% target for 12 consecutive months, and markets moved forward expectations for the Bank of England's first quarter-point rate cut.

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