UK inflation dips to 3.6% despite accelerating food price growth – as it happened
BREAKING: UK inflation dropped to 3,6% in October, easing pressure on households and providing a boost for Rachel Reeves as the chancellor prepares for her make-or-break budget next week,The Office for National Statistics (ONS) said annual inflation as measured by the consumer prices index cooled for the first time in five months, declining from a peak of 3,8% over July, August and September,Reeves has vowed to cut living costs in her highly anticipated tax and spending statement on 26 November, including measures to bring down the inflation rate to smooth the path for the Bank of England to cut interest rates.
Threadneedle Street opened the door earlier this month to a post-budget cut in borrowing costs in December after it signalled inflation had probably peaked amid mounting fears over the strength of the economy,Borrowing costs have been cut five times since Labour came to power in July 2024, with the last reduction made in August,Our main story here: This morning started off with supportive numbers for chancellor Rachel Reeves, with the annual rate of UK inflation easing to 3,6% in October,That was down from 3.
8% a month earlier, and marked the first reduction in five months,Analysts now expect that inflation has peaked, giving Reeves a chance to point to some positive news for consumers – with the easing having been led by a fall in gas and electricity prices,However, households are still facing higher food bills, which has raised some concerns for struggling consumers,Still, it has helped increase expectations of an interest rate cut by the Bank of England in December, with the vote likely hinging on BoE governor Andrew Bailey,With that data out of the way, all eyes have turned to the US where the AI bubble fears will either be calmed or reinforced by Q3 earnings figures released by Nvidia at 9pm GMT this evening.
If Nvidia managed to report improved margins when earnings are released at 9pm GMT tonight, that could help calm some nerves,Neil Wilson, UK investor strategist at Saxo Markets, expects Nvidia to report a a 54% jump in earnings at to $1,25 per share, with revenues rising 56% year-on-year to $54,8bn,He says that “deeply correlated stocks” such as Palantir, TSMC, Super Micro, CoreWeave, Nebius, “plus the entire industrial-AI complex” are “on the hook”.
Wilson adds:Analysts are sounding upbeat ahead of the report with guidance expected to be strong on continued ramp of the GB300 advanced AI servers and generally insatiable AI demand as hyperscalers continue to bolster capex.The bar is set very high but the stock is now in correction territory having slid over 10% in November and has crossed below its 50-day SMA, as is Microsoft and Tesla.Wall Street is open for trading and it’s a relatively positive start:Dow opens flat at 46,093.39 pointsS&P 500 opens 0.06% higher at 6,621.
29 pointsNasdaq opens 0.14% higher at 22,463.07 pointsFurther development in AI investment, as investors await the Nvidia Q3 results later today:Asset manager and real estate investment giant Brookfield has announced the launch of a $100bn AI infrastructure fund with equity commitments from Nvidia and the Kuwait Investment Authority.The Brookfield Artificial Intelligence Infrastructure Fund, which launches today, has already received $5bn of capital commitments from institutional and industry partners, with the fund due to build up a portfolio of energy, land, data centers and other components of the AI infrastructure chain.Meanwhile, Nokia plans to split its artificial intelligence operations into a separate unit from its telecoms business as it moves to expand the use of AI in its networks, the FT reports The Finnish telecoms group said that it would use a new network infrastructure division to house its AI and data centre businesses, while the core telecoms network operations would be part of its mobile infrastructure unit.
The AI push comes just weeks after Nvidia invested $1bn in Nokia,US futures are pointing to a higher start on Wall Street, though it will amount to a waiting game ahead of Nvidia’s earnings report, which is due after the US market closes on Wednesday,Dow futures are up 0,12%Nasdaq futures are up 0,43%S&P 500 futures are up 0.
34%Nvidia will be feeling the pressure to deliver strong third quarter results, with markets viewing the figures as a test of wider AI market strength amid concerns that the technology is facing a valuation bubble.But even if there is a bubble, Kenneth Lamont, principal at Morningstar, says many viable AI companies could end up emerging after any market correction:As the most widely held stock in AI and Big Data funds – appearing in nine out of ten funds globally – Nvidia’s Q3 results are expected to reinforce its status as the poster child of AI.However, its volatility reflects uncertainty around AI’s trajectory, as well as the sensitivity of its valuation to shifts in growth assumptions and competitive pressures.Framing the debate as either an AI bubble set to burst or the dawn of a lasting transformation misses the point.History shows it can be both: the dot-com boom left behind plenty of failures, but also the tech giants that still dominate today.
While Nvidia’s leadership in advanced chip design has propelled it to the forefront, emerging competitors, geopolitical tensions, and regulatory challenges will shape its future.Investors should remain cautious, as history shows that today’s leaders may not be the winners of tomorrow.Worth noting, as mentioned in our politics live blog, that prime minister Kier Starmer has refused to rule out extending an income tax threshold freeze in next week’s budget.When asked by Tory leader Kemi Badenoch during prime minister’s questions to confirm that he wouldn’t break another promise by freezing thresholds, Starmer sidestepped the topic, saying:The budget is one week today and we will lay out our plans.Extending the freeze would result in more people being dragged into paying higher rates of tax, particularly as wage inflation pushes up salaries.
During her last autumn budget in October 2024, chancellor Rachel Reeves said that extending the freeze would amount to breaking Labour’s election manifesto pledge to avoid raising taxes for working people:From 2028-29, personal tax thresholds will be uprated in line with inflation once again.More on PMQ’s here:Time to check in on sterling.The pound has edged 0.17% lower against the US dollar at 1.3121, briefly touching its lowest since Friday last week, when markets were hit by fresh speculation about the contents of the November 26 budget following news that Reeves was ditching plans for an income tax hike.
Part of this is explained by higher expectations of a Bank of England interest rate cut next month following the CPI data released this morning.But the dollar is also being nudged higher ahead of Nvidia’s earnings release due later today (9pm GMT).Matthew Ryan, head of market strategy at Ebury, said:The next week or so bodes to be extraordinarily important for sterling, and could have a significant bearing on the trajectory of the UK currency in the next few months.In the lead up to next week’s all-important budget announcement, market participants will have a handful of tier-1 economic data releases to digest.This morning’s October inflation report suggested that price pressures did indeed peak in September, as the Bank of England had predicted….
This should support bets in favour of a December rate cut, which remains around 80% priced in by swap markets,October retail sales and the November PMIs (both on Friday) are expected to come in consistent with the growth slowdown narrative,Big news in the utilities sector, with Severn Trent announcing that CEO Liv Garfield will step down at the end of December after more than a decade in the role,Replacing her will be Severn’s capital and commercial services director Jame Jesic, who will has been offered a £775,000 starting annual salary,That’s compared to the £873,200 currently paid to Garfield (before benefits and bonuses).
Severn said Garfield be sticking around until the end of March 2026 to help with the handover,The changeover comes at a time of growing public outrage over rising water bills, which have been increasing despite high levels of sewage pollution and executive bonus payouts,Severn is considered to be among the better-performing privatised water companies in terms of its environmental record, but is still expecting to record 13 overflow spills for 2025 (half its previous annual rate),The company said it is also likely to hit its leakage reduction target set by regulator Ofwat for the eighth straight year,However, it’s still due to hike bills by an average of 21% in April, equating to a roughly £99 annual increase, with the average household now set to pay £556 over the course of the year.
News of Garfield’s departure came as the group released its half-year results, showing a 60% jump in pre-tax profits to £307,8m for the six months to the end of September,The National Institute of Economic Research (NIESR) says that, unlike last year’s budget which features a hike in employer’s national insurance contributions, it does not expect the chancellor’s budget next week to contribute to a rise in inflation,Without any upsets, that could pave a smoother path for Bank of England interest rate cuts, forecasting two cuts in 2026,NIESR’s associate economist Monica George Michail says:We believe inflation has reached its peak and will continue to slowly trend downwards.
We therefore expect the Bank of England to implement two rate cuts next year but will nevertheless remain cautious in assessing the speed at which inflation is coming down,And unlike the announcements in the autumn 2024 budget, where a rise in business costs may have contributed to price increases in 2025, we think the upcoming budget is less likely to be inflationary,However, there remain some risks to the inflation outlook stemming from still-elevated pay growth and high household inflation expectations, as discussed by some MPC members in their November meeting,Elsewhere: the Netherlands has suspended it seizure of the Chinese owner chip maker Nexperia, the company heart of a bitter six week battle between the EU and China that threatened to halt car production,Dutch economy minister Vincent Karremans said in a statement on Wednesday that the government would suspend its decision to take supervisory control, made on 30 September, as a gesture of “goodwill” towards Beijing.
Karremans said:In light of recent developments, I consider it the right moment to take a constructive step by suspending my order under the Goods Availability Act regarding Nexperia.The decision comes as a delegation from the Netherlands met with officials in Beijing to try and resolve the matter after a bitter war of words erupted last week between the economy minister and the Chinese ministry of commerce.Karremans added:In the past few days we have had constructive meetings with the Chinese authorities.We are positive about the measures already taken by the Chinese authorities to ensure the supply of chips to Europe and the rest of the world.We see this as a show of goodwill.
We will continue to engage in constructive dialogue with the Chinese authorities in the period ahead.The continued (but easing) rate of rental prices across the country is putting further pressure on struggling households, experts warn.However, industry lobby groups are arguing that politicians should consider ways to boost supply of rental properties, rather than punishing landlords.Nathan Emerson, CEO of Propertymark, the membership organisation for estate agents, says:An increase in rental prices highlights the continuing pressures faced by the private rented sector.While rising rents may reflect strong demand and limited supply, they also intensify the affordability challenges many tenants are already experiencing.
Letting agents and landlords will need to navigate these conditions carefully, ensuring any increases remain fair and sustainable,Policymakers must recognise that persistent rental inflation points to a system struggling to meet demand and respond with measures that encourage more homes into the sector rather than driving landlords out,Data alert: Another batch of figures released by the ONS this morning shows a 2,6% rise in UK house prices in September,That is the smallest annual rise since May this year, and compares to the August reading of 3.
1% (following an upward revision to the figures).Average UK house prices increased by 2.6%, to £272,000 in the 12 months to September 2025, down from 3.1% in the 12 months to August.Average UK private rents rose by 5.
0%, to £1,360 in the 12 months to October 2025, down from 5.5% in the 12 months to September.pic.twitter.com/1g6qG2dN8DThat was helped by a drop in private sector rents in October, which were 5% higher than a year earlier but lower than the 5.
5% annual increase recorded in September.That is also the smallest increase in over three years, in August 2022.Commenting on today’s house price data for September 2025 and rents data for October 2025, ONS Head of Housing Market Indices Aimee North said: (quote 1 of 2) pic.twitter.com/RieUbQVywXAimee North continued: (quote 2 of 2) Read the full article ➡️ https://t.
co/WxxsY2RXQK pic.twitter.com/9quJzYdZH2Today’s 3.6% CPI inflation reading was shallower than some economists had expected, but even those analysts say this is unlikely to stand in the way of another Bank of England rate cut.But BoE governor Andrew Bailey continues to be the hinge vote.
James Smith, developed markets economist covering the UK at ING, says UK inflation “is undoubtedly past the peak” and is likely to follow the eurozone in seeing food price levels ease off:Fortunately, evidence from the eurozone – where fresh food inflation is falling – coupled with a levelling off in the newly-reinstated producer price data for food products, suggests inflation at the supermarkets is probably more or less at its peak,Services inflation also eased from 4,7% to 4,5%, with the drop principally down to air fares, and restaurant and cafe prices – often seen as a bellwether for “persistence” among services categories – increased sharply on the month,However that is potentially linked to the broader food price pressure, Smith explained.
Smith adds:That said, taking a broader view, services is still generally heading in the right direction once you ignore the month-to-month volatility,Remember too that wage growth in the private sector is easing rapidly,We doubt there’s anything that will shake the conviction of the Bank’s doves, who argue immediate easing is necessary to offset potential weakness emanating from the jobs market,This leaves Bailey the deciding factor in December’s rate decision:The bottom line here is that there’s unlikely to be anything in this data that will change the minds of many voters on the BoE committee,That means the decision continues to hinge on governor Andrew Bailey, who is somewhere between the two camps – though given he is more sympathetic to the view of the doves, we think he will still tip the balance in favour of a cut in December
Georgina Hayden’s quick and easy recipe for roast hake with caper anchovy butter | Quick and easy
I love this one-tray dinner; it feels elegant but easy, and worthy of both a midweek meal and if you are entertaining. The punchy anchovy and garlic butter does all the hard work, and gives the impression of more effort than was actually exerted. But what to serve it with, I hear you ask? Well, it wouldn’t be out of place with creamy mashed potato, buttery polenta or a salad. Just make sure to baste the fish halfway through cooking, to get all the flavour and juices back into it.Prep 10 min Cook 30 min Serves 42 garlic cloves, peeled5 anchovies 4 tbsp capers ½ bunch chives 1 lemon 90g unsalted butter, cut into cubesSea salt and black pepper250g sweet heart cabbage, or other greens2 onions, peeled and halved2 tbsp olive oil4 150g hake or cod fillets, skinned and, if need be, pin-bonedHeat the oven to 220C (200C fan)/425F/gas 7
Sami Tamimi’s recipes for prawn and tomato stew with fregola, and herby quick-pickled vegetable salad
Hearty and warming, this prawn and tomato stew with fregola is a comforting bowl, with the fresh pesto brightening every bite. It pairs beautifully with a crisp, fragrant, quick-pickled vegetable salad; the freshness cuts through the richness of the stew perfectly. I’ve always loved leafy, lively salads, and I could honestly eat one with every meal, every day.Prep 20 min Cook 50 min Serves 4220g cherry tomatoes 60ml olive oil 1 large onion, peeled and finely chopped (180g)3 garlic cloves, peeled and crushed2cm piece fresh ginger, peeled and finely grated (15g)1 green chilli, finely chopped, seeds and all1½ tsp coriander seeds, lightly crushed in a mortar1 tsp cumin seeds, lightly crushed in a mortar6 cardamom pods, lightly bashed 15g dill, finely chopped2 tsp tomato paste400g tinned chopped tomatoes Salt and black pepper 120g fregola 400g frozen king prawns, defrosted, or fresh, peeled and deveinedFor the coriander pesto20g coriander, roughly chopped1 green chilli, finely chopped, seeds and all35g pine nuts, lightly toasted 3 tbsp olive oil1 lemon, zest finely grated to get 1½ tsp, then cut into wedges, to servePut a large saute pan on a high heat. Toss the tomatoes with a teaspoon of oil and, once the pan is very hot, add the tomatoes and cook, shaking the pan a few times, for about five minutes, until blistered and deeply charred all over
How to make risotto alla milanese – recipe | Felicity Cloake's Masterclass
Risotto alla milanese is, like the city it calls home, elegantly simple, but very rich. The saffron that gives the dish its striking colour is rightly expensive (it takes about 150 flowers to produce a mere gram), but you don’t need much and, though it’s often served alongside osso buco, I think it makes a fine meal on its own with a bitter-leaf salad.Prep 5 min Cook 30 min Serves 41 onion 75g butter, or 15g butter plus 60g bone marrow350g risotto rice (carnaroli, arborio, vialone nano)1 litre beef stock, or chicken or vegetable stock75ml dry white wine (see step 4)1 level tsp saffron threads75g finely grated parmesan, or grana padano or a vegetarian alternativePeel and finely chop the onion; the aim is for it almost to disappear into the dish, rather than remaining as distinct chunks, so take your time over doing this (you could substitute two shallots, if you prefer – their sweetness works particularly well with the flavour of the wine and cheese).Melt a generous tablespoon of the butter in a frying pan set over a medium-low heat, then fry the chopped onion until soft, golden and limp, but not coloured.Turn the heat up to medium-high, add the rice and fry, stirring constantly, until the grains are hot and starting to turn translucent around their edges
2210 By Natty Can Cook, London SE24: ‘Much more than just posh jerk chicken at fancy prices’ – restaurant review | Grace Dent on restaurants
There’s an attention to detail in every dish that makes this place more than fit for a special occasionIt’s 6pm in Herne Hill, south-east London, and I’ve popped out for some Caribbean food wearing fancy athleisure wear. Yoga trousers and a smart hoodie, but PE kit nonetheless. And, once I arrive at 2210 By Natty Can Cook, I realise I am severely underdressed.When chef Nathaniel Mortley announced that he was opening a restaurant that aimed to celebrate Caribbean culture “in style” and to win a Michelin star, his loyal Instagram following, as well as their families and friends, took the brief and dressed accordingly. As fancily plated ackee and saltfish spring rolls passed by, as well as a lot of rum punch, I rustled in my handbag for some bigger earrings and more makeup
‘Simple, well-crafted and excellent’: supermarket chutneys, tasted and rated | The food filter
Our resident taster dipped, spread and dolloped his way through 10 chutneys in time for Christmas, so you don’t get in a pickle choosing one for yourself The fair price for 14 everyday items, from cleaning spray to olive oilThe Guardian’s journalism is independent. We will earn a commission if you buy something through an affiliate link. Learn more.Chutney is a heritage recipe that’s been largely unchanged for a century, and some of the best versions are the simplest and most traditional. That said, even when it’s made on an industrial scale, chutney usually features just fruit, sugar, vinegar and perhaps some pectin
It’s not all about roasting on an open fire – there’s so much more you can do with chestnuts
If I’d ever spared a thought for how chestnuts – the sweet, edible kind, not the combative horsey sort – were harvested, I would probably have conjured rosy-cheeked peasants bent low in ancient forests and filling rough-hewn hessian sacks by hand. Back-breaking labour, sure, but so picturesque!I was delighted, therefore, while on a writing retreat in Umbria last month, to get the opportunity to watch an elderly couple manoeuvre a giant vacuum around their haphazard orchard, followed by their furious sheepdog. The fallen crop was sucked into a giant fan that spat their bristly jackets back out on to the ground, and the nuts then went to be sorted by other family members on a conveyor belt in the barn – the good ones to be sold in the shell, the less perfect specimens swiftly dropped into a bucket for processing.Later in the week, a lorry turned up in the village square to pick up bags from other small local producers, and that evening I roasted a pan of chestnuts on the fire with new appreciation, while loudly bemoaning the disappearance from the streets of London of the chestnut sellers of my childhood (though this makes me sound positively Dickensian, I can confirm that I’m talking about this century. Note also that Nigel Slater is less starry-eyed on the subject
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