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UK Inflation Eases to 3.6% in October, Boosting Odds of a December Rate Cut

A smaller increase in capped energy bills drove the decline, with food prices rising again.

Overview

  • Official ONS data show CPI slowed to 3.6% from 3.8% in September, the first drop after a three‑month plateau and the lowest since June.
  • ONS chief economist Grant Fitzner said the fall was led by gas and electricity prices rising less year on year after Ofgem’s October cap change.
  • Core inflation dipped to 3.4% and services inflation to 4.5%, while food and non‑alcoholic drink inflation rebounded to 4.9%.
  • Economists said the reading increases the likelihood of a Bank of England rate cut in December, though the decision could hinge on next week’s Budget and further data.
  • The figures land a week before Chancellor Rachel Reeves’s Budget, offering a political lift as growth slows and unemployment has ticked up.