{"id":93924,"date":"2025-10-22T08:45:07","date_gmt":"2025-10-22T08:45:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/93924\/"},"modified":"2025-10-22T08:45:07","modified_gmt":"2025-10-22T08:45:07","slug":"uk-inflation-unexpectedly-remains-at-3-8-for-third-month-in-a-row-inflation","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/93924\/","title":{"rendered":"UK inflation unexpectedly remains at 3.8% for third month in a row | Inflation"},"content":{"rendered":"

UK inflation was unchanged last month at 3.8%, confounding expectations of a rise, in welcome news for the chancellor, Rachel Reeves<\/a>, as she plans for her crucial budget next month.<\/p>\n

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<\/a> and July<\/a>.<\/p>\n

City expectations had pointed to a 4% reading but the ONS said upward pressure from transport prices was offset by cheaper food and a slowdown in inflation for \u201crecreation and culture\u201d, including live music tickets.<\/p>\n

It was the 12th month in a row CPI remained above the government\u2019s 2% target, however.<\/p>\n

The reading raised hopes that the Bank of England<\/a> 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.<\/p>\n

Rising food prices, driven partly by climate-related factors, have been causing mounting concern, and policymakers are likely to welcome the fact that food prices declined 0.2% compared with August, the first month-on-month decline since May last year.<\/p>\n

Annual food price inflation eased to 4.5%, from 5.1% in August, the first time it has slowed since March.<\/p>\n

Inflation graphic<\/a><\/p>\n

The ONS said another source of downward pressure on inflation was slower inflation in the \u201crecreation and culture\u201d sector, which includes trips to the theatre and cinema.<\/p>\n

Prices here were flat month-on-month, with the ONS pointing in particular to live music, where prices were down 8.6% compared with August \u2013 compared with a 5.8% monthly rise a year ago.<\/p>\n

These weaker areas offset higher prices from transport, in particular petrol and air fares. Transport costs were up 3.8% year on year, the ONS said, higher than the 2.4% annual rate in August.<\/p>\n

Duties on alcohol and tobacco, and the price of train tickets, traditionally increase in line with September\u2019s reading of the retail prices index measure of inflation, which has been superseded for most other purposes.<\/p>\n

The ONS said RPI inflation in September was 4.5%. No decision on uprating will be made until the budget, however, and Reeves could choose to implement lower rises as an inflation-fighting measure.<\/p>\n

Reeves said: \u201cI 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.\u201d<\/p>\n

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The chancellor said last week she would announce a \u201crange of policies\u201d<\/a> in her 26 November budget to \u201cbear down on some of the costs that people face\u201d.<\/p>\n

The comments came after the Bank of England pointed to the importance of \u201cadministered\u201d prices, such as energy bills and transport fares, in driving up consumer costs.<\/p>\n

Reeves is expected to meet cabinet ministers on Thursday to ask what each department can do to help tackle rapid cost increases.<\/p>\n

The International Monetary Fund forecast last week<\/a> that UK households would experience the highest inflation rate in the G7 this year and next.<\/p>\n

Policymakers on the Bank\u2019s nine-member monetary policy committee have been concerned about the unexpected persistence of inflation. No reduction is expected at its 6 November meeting, shortly before Reeves\u2019s budget, but the final meeting of 2025 is on 18 December.<\/p>\n

The Bank\u2019s latest forecasts, published in August, suggested inflation would peak at 4% in September before declining towards the 2% target through next year.<\/p>\n

September\u2019s CPI inflation rate is used for uprating the state pension. However, the 3.8% rate is lower than the 4.8% annual wage growth in the three months to the end of July, which will therefore dictate next year\u2019s rise under the \u201ctriple lock\u201d promise<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"UK inflation was unchanged last month at 3.8%, confounding expectations of a rise, in welcome news for the…\n","protected":false},"author":2,"featured_media":93925,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-93924","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/93924","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=93924"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/93924\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/93925"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=93924"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=93924"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=93924"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}