𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Inflation is set to have eased sharply last month, offering some relief to households and a boost for the Government, experts think.

Most economists think the rate of Consumer Prices Index (CPI) inflation will have slowed to 3.5% in October, from 3.8% in September, when official figures are published on Wednesday.

September’s CPI rate remained at the same level as July and August.

Price rises cooling off across the UK could offer some respite for households after inflation has remained at the same level for three months in a row.

Elevated food and drink prices have been putting pressure on overall inflation this year, with households seeing steep rises particularly for items such as chocolate, coffee, cheese and eggs.

However, the most recent dataset showed the cost of food and non-alcoholic drinks fell between August and September, marking the first monthly decline since May last year.

Experts think food price inflation could continue to ease in October.

Furthermore, energy costs are expected to be an important factor putting downward pressure on the overall inflation rate.

Ofgem raised the energy price cap by 2% in October, but this is significantly less than the 9.6% hike last year, meaning energy price inflation is set to fall.

A lower inflation reading could also provide a boost for the Government which will be paying close attention to the figures ahead of its autumn Budget statement next week.

The Chancellor has said she wants inflation to fall to support people with cost-of-living challenges and give the Bank of England room to cut interest rates.

It would offer a more encouraging set of data after UK economic growth was lower than forecast in the third quarter, and unemployment hit the highest rate since 2021.

Jack Meaning, chief UK economist for Barclays, said he thinks September “represented the peak of the inflation hump” and that CPI will fall to 3.5% in October.

Robert Wood and Elliott Jordan-Doak, UK economists for Pantheon Macroeconomics, also said they were forecasting inflation to ease to 3.5%, driven by energy costs.

But they also cautioned over a hike in university tuition fees, particularly for international students, putting upward pressure on inflation last month.

Sanjay Raja, chief UK economist for Deutsche Bank, predicts a smaller fall in overall inflation to 3.7% in October.

But he said that the upcoming autumn Budget was likely to mark the “next most important inflation forecast update”, with the potential for tax rises pushing down on inflation.

“Speculation around lower energy bills, indexation costs, duties and food prices remain rife,” Mr Raja wrote in a research note.

“We expect the Chancellor to push through some modest measures to pull down on prices come November 26.

“This will give us a good sense of where 2026 inflation will land.”