Inflation fell to 3.6% in October, easing from the 3.8% rate reported in September, according to new figures from the Office for National Statistics (ONS), measured by the Consumer Prices Index (CPI).
Housing and household services made the largest downward contribution to the change, while food and non-alcoholic beverages made the largest offsetting upward contribution.
On a monthly basis, CPI rose by 0.4% in October 2025, compared with a rise of 0.6% in October 2024.
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 3.4% in the 12 months to October, down from 3.5% in September and below forecasts.
The figures make the case for an interest rate cut in December from the Bank of England look increasingly likely.
Ben Jones, lead economist, CBI, said: “Inflation eased in October, broadly in line with the Bank of England’s expectations. With Q3 GDP figures confirming a weak growth backdrop, and the labour market continuing to soften, today’s figures add to the evidence that price pressures are gradually subsiding.
“Combined with the likelihood of further fiscal consolidation measures at the Budget, the data should give the Bank’s Monetary Policy Committee confidence that inflation risks are diminishing. If this trend continues, the case for an interest rate cut in December looks increasingly compelling.”
