Inflation remained stubborn at 3.8% in the 12 months to September, unchanged from August, according to new figures from the Office for National Statistics (ONS), measured by the Consumer Prices Index (CPI).
While this is below forecasts, with inflation expected to come in at 4%, it remains well above the Bank of England’s 2% target.
On a monthly basis, CPI was unchanged in September 2025, as in September 2024.
Transport made the largest upward contribution to the CPI rates; recreation and culture, and food and non-alcoholic beverages made the largest offsetting downward contributions.
Core inflation, meanwhile, which takes out volatile factors like energy, food, alcohol and tobacco to give a clear picture of underlying trends, came in at 3.5% in the 12 months to September, down from 3.6% in August and below forecasts.
Martin Sartorius, principal economist, CBI, said: “Inflation came in lower than expected in September, bringing some relief to hard-pressed households, though it remains well above the Bank of England’s 2% target. Price pressures should begin to slowly ease in the coming months, but we are unlikely to see a more substantial downshift in inflation until the first half of next year.
“Today’s downside surprise raises the possibility that a rate cut by the Bank of England’s Monetary Policy Committee could be back on the table in November. While some MPC members may prefer to keep rates on hold given the recent uptick in inflation expectations, September’s softer reading could give the broader Committee greater confidence to reduce rates without risking further persistence in price pressures.”
