[LONDON] British inflation and a key underlying measure of price growth both unexpectedly held steady in September, official figures showed, offering some relief to finance minister Rachel Reeves ahead of her November budget.
The annual rate of consumer price inflation remained at 3.8 per cent for the third month running, the Office for National Statistics said on Wednesday (Oct 22).
Most economists polled by Reuters and the Bank of England (BOE) had expected a rise to 4.0 per cent.
Inflation in the services sector remained at 4.7 per cent in September, the same rate as in August and below the Reuters poll forecast of 4.9 per cent.
Sterling fell against the US dollar immediately after the data was published.
British inflation will be the highest among the Group of Seven economies in 2025 and 2026, the International Monetary Fund said last week, hampering the BOE’s slow progress in cutting interest rates to help the slow economy.
The BOE expects British consumer price inflation to gradually weaken, but only hit its 2 per cent target in the April-to-June period of 2027.
Britain’s labour market is losing steam, but policymakers at the central bank are split on how much inflation pressure remains in the economy, with inflation expectations among the public rising in recent months. REUTERS
