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1h ago

UK Inflation Eases to 3.6% in October Ahead of Budget

Markets now see a December Bank of England rate cut as more likely, with the 26 November Budget the next test for the outlook.

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A shopper browses in the fresh fish section at a Tesco Extra supermarket in Cheshunt, Britain, March 25, 2025. REUTERS/Toby Melville/File Photo
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People walk near the Bank of England building in London, Britain, July 3, 2024. REUTERS/Maja Smiejkowska/File Photo

Overview

  • Official ONS data show the slowdown was driven mainly by gas and electricity rising less than a year earlier after Ofgem’s smaller October price‑cap increase, with hotel prices also falling.
  • Food and non‑alcoholic drink inflation accelerated to 4.9%, partially offsetting the headline decline.
  • Core CPI edged down to 3.4% and services inflation to 4.5%, both still above the Bank of England’s 2% target.
  • The 3.6% reading was slightly above the roughly 3.5% consensus; CPIH fell to 3.8% and RPI to 4.3%.
  • Economists say the figures strengthen the case for a December rate cut, though policies announced in Chancellor Rachel Reeves’s Budget could influence the Bank’s decision.