The UK’s inflation rate remained unchanged at 3.8% in September, defying expectations of a rise and marking the third consecutive month at that level.
According to the Office for National Statistics (ONS), the figure stayed below the Bank of England’s 4% forecast, though it remains significantly higher than the 2% target set by the central bank. The data signal modest relief for households after a prolonged period of cost pressure.
Grant Fitzner, the ONS’s chief economist, said the main contributors to the stubborn rate were fuel and air travel costs, which “did not fall as sharply as they did last year”. However, he added that “these rises were offset by lower prices across leisure and cultural goods, particularly live events”, helping prevent an overall increase in the inflation rate.
Food and non-alcoholic drink prices increased at a slower pace, with inflation in this category easing to 4.5% in September from 5.1% the previous month. Fitzner noted this as “a welcome indication that consumers are beginning to see more stability at the supermarket tills”, even as overall prices remain well above pre-pandemic levels.
Data from the ONS’s CPIH (Consumer Prices Index including owner occupiers’ housing costs) time series show that price growth has plateaued in recent months, following a gradual slowdown throughout 2024. The CPIH annual rate – used as a broader measure of living costs – also stood at 3.8% in September, confirming that “inflationary pressures remain stable but elevated”.
The Bank of England is expected to take a cautious stance on interest rates, with analysts suggesting that a steady CPIH rate could reinforce “expectations of a rate cut later this year if the trend of subdued inflation continues”.
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The ONS commented that “it is crucial to interpret these figures in the context of ongoing uncertainty in energy, food and transport markets, which could drive volatility in coming months”.
Overall, the latest figures reflect a mixed picture: steady yet stubborn inflation, easing food prices, and persistent pressure on household budgets even as the broader economy shows signs of cooling.
