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CPI remains unchanged at 3.8% in boost for Rachel Reeves: "Political reprieve rather than an economic recovery"

ended 22. October 2025

THE Consumer Prices Index (CPI) remains unchanged at 3.8% in boost for Rachel Reeves with experts warning it is a "political reprieve rather than an economic recovery".

CPI rose by 3.8% in the 12 months to September 2025, unchanged from August, Office for National Statistics (ONS) data published this morning showed. 

On a monthly basis, CPI was unchanged in September 2025, as in September 2024.

Transport made the largest upward contribution to the monthly change in both CPIH and CPI annual rates.

Recreation and culture, and food and non-alcoholic beverages made the largest offsetting downward contributions.

Grant Fitzner, Chief Economist at ONS, said: “A variety of price movements meant inflation was unchanged overall in September. The largest upward drivers came from petrol prices and airfares, where the fall in prices eased in comparison to last year.”

Financial experts said the UK economy is still under intense pressure ahead of the Autumn Budget next month.

Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, said: “Inflation staying unchanged may mean celebration at Number 11 but it will not improve conditions and sentiment in the real economy. 

"Households and businesses remain under intense pressure and we have yet to face the fiscal onslaught coming in the form of the Autumn budget.”

Rohit Kohli, Director at Romsey-based The Mortgage Stop, said the Uk is in trouble.

He added: "Any FTSE board would be convening an emergency meeting to question the direction of the business. Inflation is stuck at 3.8%, growth is flat, and September borrowing was £20.2bn, up £1.6bn. The Budget date is fixed, but it was set at the latest slot available, which signals delay rather than strategy. 

“We need less speculation and more certainty: set a clear path, back investment, avoid another round of tax rises, and get a grip on day-to-day spending. The housing market can feel it already. People delay decisions, transactions slow, confidence ebbs. Right now this looks like a business with no plan, and the country’s share price is tumbling.”

Ranald Mitchell, Director at Norwich-based Charwin Mortgages, said the news will be a relief for Reeves.

He continued: "Flat inflation is a political reprieve rather than an economic recovery. Petrol and airfares have propped up the figures, but core prices are still running too hot for comfort. 

“The Government will welcome a pause in price rises ahead of the Budget, but the Bank of England won’t cut rates on sentiment alone. Unless we see a clearer downward trend in services inflation, this feels more like a breather than a breakthrough.”

David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth Ltd, said the public are still seeing elevated borrowing costs.

He added: "Rachel Reeves may welcome this stable inflation reading ahead of the Autumn Budget but there’s very little here to celebrate. The headline rate has remained static but core and services inflation remain stubbornly high, telling us that underlying domestic pressures are far from resolved. 

“Policy measures so far have done little to ease these trends, meaning the Bank of England is likely to remain cautious. For UK households, that translates into elevated borrowing costs and little near-term prospect of relief on mortgage rates from Threadneedle Street. The anticipation of the Chancellor's Budget is becoming almost palpable.”

Eamonn Prendergast, Chartered Financial Adviser at Bromley-based Palantir Financial Planning Ltd, said he doubts the figures are a turning point for the government.

He continued: "The latest CPI data holding steady at 3.8% offers short-term relief but is not a turning point. Inflation may have paused, but underlying pressures particularly in services remain stubborn. 

“This isn’t a green light for rate cuts yet, more a breather before the next move. For the Government, it’s a political reprieve ahead of the Budget, but for the Bank of England, the data likely reinforces a “wait and see” stance rather than an early pivot to easing.”

7 responses from the Newspage community

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Editor
Emma Jones
Managing Director at Whenthebanksaysno.co.uk
Inflation staying unchanged may mean celebration at Number 11 but it will not improve conditions and sentiment in the real economy. Households and businesses remain under intense pressure and we have yet to face the fiscal onslaught coming in the form of the Autumn budget.
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Editor
Rohit Kohli
Director at The Mortgage Stop
Any FTSE board would be convening an emergency meeting to question the direction of the business. Inflation is stuck at 3.8%, growth is flat, and September borrowing was £20.2bn, up £1.6bn. The Budget date is fixed, but it was set at the latest slot available, which signals delay rather than strategy. We need less speculation and more certainty: set a clear path, back investment, avoid another round of tax rises, and get a grip on day-to-day spending. The housing market can feel it already. People delay decisions, transactions slow, confidence ebbs. Right now this looks like a business with no plan, and the country’s share price is tumbling.
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Editor
Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
Flat inflation is a political reprieve rather than an economic recovery. Petrol and airfares have propped up the figures, but core prices are still running too hot for comfort. The Government will welcome a pause in price rises ahead of the Budget, but the Bank of England won’t cut rates on sentiment alone. Unless we see a clearer downward trend in services inflation, this feels more like a breather than a breakthrough.
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Editor
David Stirling
Independent Financial Adviser at Mint Wealth
Rachel Reeves may welcome this stable inflation reading ahead of the Autumn Budget but there’s very little here to celebrate. The headline rate has remained static but core and services inflation remain stubbornly high, telling us that underlying domestic pressures are far from resolved. Policy measures so far have done little to ease these trends, meaning the Bank of England is likely to remain cautious. For UK households, that translates into elevated borrowing costs and little near-term prospect of relief on mortgage rates from Threadneedle Street. The anticipation of the Chancellor's Budget is becoming almost palpable.
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Editor
Eamonn Prendergast
Chartered Financial Adviser at Palantir Financial Planning Ltd
The latest CPI data holding steady at 3.8% offers short-term relief but is not a turning point. Inflation may have paused, but underlying pressures particularly in services remain stubborn. This isn’t a green light for rate cuts yet, more a breather before the next move. For the Government, it’s a political reprieve ahead of the Budget, but for the Bank of England, the data likely reinforces a “wait and see” stance rather than an early pivot to easing.
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Editor
Scott Gallacher
Director at Rowley Turton
Inflation remains stubbornly high — no surprise to anyone, as prices continue to rise all around us. Services inflation remains notably higher than goods inflation, perhaps partly due to Rachel Reeves’ recent National Insurance hike.

That’s particularly concerning for pensioners, who tend to face what might be called a higher “Silver CPI.” Older households spend more on essentials and services — such as energy, healthcare, insurance, and leisure — where prices have risen fastest, and less on goods, where inflation has eased. This means many pensioners are effectively experiencing a higher personal inflation rate than the official figures suggest.

Given these pressures, I can’t see the Bank of England wanting to cut rates any time soon — so there’s unlikely to be much change ahead for either savers or borrowers.
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Anita Wright
Chartered Financial Planner at Ribble Wealth Management
Today’s flat inflation print feels like a holding pattern, not a turning point. Politically, an unchanged 3.6% avoids awkward headlines and gives the Treasury space to argue that the disinflation journey has not derailed. But context matters: international forecasters still see the UK topping the G7 inflation league in 2025. Senior BoE figures are warning that recession-type behaviours are setting in: firms are freezing hiring, demand is softening, and credit is getting harder to secure. Markets are telling the same story — gilt yields are jumpy, the pound is twitchy, and investors demand a higher UK risk premium. And the IMF has underlined the gap between what the headline growth number says and how people actually feel in their wallets.
Taken together, this looks less like a crash and more like a slow bleed. Without a shift to policies that boost productivity and confidence, the UK risks “death by inflation”: costs too high for too long, real incomes stuck, and growth too weak.