Wed, 22 Oct 2025

Wed, 22 Oct 2025 Relief over inflation, but what now for the Budget?

Prices rise slower than expected in the year to September while the chancellor hints at help in the Budget.
Inflation has dropped slightly from last month's 4% fear, but remains stubbornly high at 3.8%. Despite this, economists predict that prices will fall back towards the Bank of England's target of 2% next year. Households may still be cautious about spending due to past experiences with rapid inflation, but wages are continuing to rise faster than prices. Food prices eased in September, and experts believe that the impact of higher commodity costs is fading. The Chancellor has hinted at further help on energy bills in November's Budget, while businesses remain wary of tax rises that could stoke inflationary pressures. The Bank of England will likely keep interest rates steady until it feels that inflation is under control. However, some analysts think there may be a chance of a "Santa cut" in December to boost the economy ahead of Christmas. Overall, while there's still uncertainty about the future path of prices, the cost-of-living squeeze is easing for many households.
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