New official figures reveal that the rate of inflation in the United Kingdom has fallen, but households are being cautioned that this respite may be short-lived ahead of the government's upcoming budget announcement.
Inflation Figures Show Modest Improvement
The Office for National Statistics confirmed that the Consumer Prices Index (CPI) increased by 3.6% in the 12 months to October 2025. This represents a slight decrease from the 3.8% rate recorded in September.
On a monthly basis, CPI rose by 0.4% in October 2025. This is a slower pace of increase compared to the 0.6% rise seen in October of the previous year.
The statistics show that housing and household services provided the most significant downward pressure on the inflation rate. This was partially offset by rising costs in food and non-alcoholic beverages.
Core Inflation and Sector Analysis
Looking at core inflation, which excludes volatile items like energy, food, alcohol, and tobacco, the rate also saw a modest decline. Core CPI rose by 3.4% in the twelve months to October, down from 3.5% in September.
A breakdown of the figures shows that the annual rate for CPI goods fell from 2.9% to 2.6%, while the rate for services decreased from 4.7% to 4.5%.
Grant Fitzner, Chief Economist at the ONS, commented on the drivers behind the figures. He stated: “Inflation eased in October, driven mainly by gas and electricity prices, which increased less than this time last year following changes in the Ofgem energy price cap.”
The Looming Budget Shadow
Despite the positive movement, financial experts are urging caution. The upcoming Autumn Budget, scheduled to be outlined by Chancellor Rachel Reeves on November 26, is creating significant uncertainty.
Ben Perks, Managing Director at Stourbridge-based Orchard Financial Advisers, described the current situation as the 'calm before the storm'.
He advised: “It’s always encouraging to see inflation edge lower and this could lead to lower interest rates and provide some respite to borrowers. Get those deals locked in though, as the Budget looms we could be looking at a very different story in a few weeks time.”
With the Treasury and financial institutions already making moves in anticipation of the budget, the brief period of easing inflation may soon be overshadowed by new fiscal policies.