UK inflation unexpectedly remains at 3.8% for third month in a row
UK inflation was unchanged last month at 3.8%, confounding expectations of a rise, in welcome news for the chancellor, Rachel Reeves, as she plans for her crucial budget next month.The Office for National Statistics said that inflation measured on the consumer prices index remained at the same level in September as in August and July.City expectations had pointed to a 4% reading but the ONS said upward pressure from transport prices was offset by slightly cheaper food and a slowdown in inflation for “recreation and culture”, including live music tickets.The September reading raised hopes that the Bank of England could cut interest rates sooner than previously expected, with markets moving their bets for the first full quarter-point reduction from March to February next year.
Rising food prices, driven partly by climate-related factors, have been causing mounting concern,Policymakers are likely to welcome the fact that food prices declined 0,2%, compared with August, the first monthly fall since May last year,Annual food price inflation eased to 4,5%, from 5.
1% in August, the first time it has slowed since March.The ONS said another source of downward pressure on inflation came from the “recreation and culture” sector, which includes trips to the theatre and cinema.Prices here were flat month on month, with the ONS pointing in particular to live music, where prices were down 8.6%, compared with August.These weaker areas offset higher prices from transport, in particular petrol and air fares.
Transport costs were up 3,8% year on year, the ONS said, higher than the 2,4% annual rate in August,While September’s inflation rate of 3,8% was lower than expected, it remained well above the government’s 2% target, the 12th successive month that CPI has surpassed that level.
Reeves said: “I am not satisfied with these numbers.For too long, our economy has felt stuck, with people feeling like they are putting in more and getting less out.That needs to change.All of us in government are responsible for supporting the Bank of England in bringing inflation down.”Reeves said last week she would announce a “range of policies” in her 26 November budget to “bear down” on some of the costs that people faced.
The Bank of England has pointed to the importance of “administered” prices, such as energy bills and transport fares, in driving up consumer costs.The chancellor is expected to meet cabinet ministers on Thursday to ask what each department can do to help tackle rapid cost increases.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionThe International Monetary Fund forecast last week that UK households would experience the highest inflation rate in the G7 this year and next.September’s CPI rate is used for uprating a range of benefits, including universal credit, disability payments and the state pension.However, under the “triple lock” promise, next year’s state pension rise will be dictated by the higher 4.
8% reading for annual wage growth excluding bonuses in the three months to the end of July.Duties on alcohol and tobacco, and the price of train tickets, traditionally increase in line with September’s reading of the retail prices index, a separate measure of inflation superseded for most other purposes.The ONS said RPI inflation in September was 4.5%.No decision on uprating will be made until the budget, however, and Reeves could choose to implement lower rises as an inflation-fighting measure.
Policymakers on the Bank’s nine-member monetary policy committee have been concerned about the unexpected persistence of inflation.No reduction is expected at its 6 November meeting, shortly before Reeves’s budget, but the final meeting of 2025 is on 18 December.Thomas Pugh, an economist at the consultancy RSM, said: “Inflation will probably trend down only gradually from here, so we doubt this will be enough to tempt the Bank of England into cutting interest rates next month.But it does put a December rate cut back on the cards.”The Bank’s latest forecasts, published in August, suggested inflation would peak at 4% in September before declining towards the 2% target through next year.
Scotland demands £24.5m from Westminster for Trump and Vance visits
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Lucy Powell urged ministers to rethink legal action against Labour donor’s firm
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Jenrick accused of being ‘anti-British’ after saying he would ‘probably’ ban burqa – as it happened
Robert Jenrick, the shadow justice secretary, has said that he would probably support banning women wearing burqas in public.In making the comment, in a phone-in on Talk, Jenrick contradicted the position taken by his party leader, Kemi Badenoch.Asked if he would ban the burqa, Jenrick replied: “I probably would ban the burqa.”Jenrick dismissed suggestions that this was an extreme position, saying that in Italy the prime minister Giorgia Meloni is introducing a burqa ban. He went on:I think there’s definitely a strong argument for it
Why is there a national inquiry into grooming gangs and how is it going?
A national inquiry into grooming gangs was announced by Keir Starmer in June but it is yet to get under way.So far, a suitable judge has not been identified, one of two named candidates to become its chair has said she will not stand and three survivors have stepped down from the panel overseeing the recruitment.It followed disclosures over many years that thousands of girls and women across UK towns and cities were groomed and raped by street-based groups.In a majority of these gangs, there appeared to be a pattern of men, often of Asian and Pakistani origin, grooming vulnerable girls.Nearly all of the cases were historical and date back to the 90s and 00s
How Rachel Reeves could balance Britain’s books and lower inequality | Letters
Rachel Reeves has said that higher taxes on the wealthy will be a part of the story at the autumn budget (Report, 15 October). The government must use this moment to ensure that the super-rich contribute their fair share rather than cutting services that impact the poorest and most marginalised.We all want the same things: thriving communities, good jobs and a future that we can look to with hope. But the rules have been rigged by the super-rich and powerful, allowing them to hoard wealth while the rest of us scrape by. This is fuelling division at a time when people desperately need meaningful change
Will no one think about poor Boris? Former PM smirks and sighs through Covid inquiry | John Crace
Bliss it was in that dawn to be alive, but to be young was very heaven. Just not if you happened to be a schoolkid during the pandemic. Then you were being asked to make the biggest sacrifices to protect elderly people, even though you were the least at risk. Still, I suppose there was a lesson in there somewhere. Almost everyone who comes into contact – however indirectly – with Boris Johnson generally finds they have been done over at some point
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