Wed, 22 Oct 2025

Wed, 22 Oct 2025 Stable inflation gives chancellor space to break doom loop

Steady inflation and lower bond yields gives Rachel Reeves an opportunity to break the fiscal doom loop, but will she take it?

* September inflation rate remained at 3.8%, failing to breach the expected 4% mark
* Economists predict a downward trend from here, with significant falls in inflation expected in the spring as regulated price rises drop out of calculation
* Food price inflation is believed to have peaked and will no longer drive up overall inflation
* IMF predicts UK inflation will fall back to 2% target by end of next year
* Interest rates may be cut, with some experts suggesting four rate cuts over the next year to take interest rates down to 3%
* Effective interest rates on UK government debt fell sharply, saving potentially billions in Budget calculations
* Chancellor's claim that Britain is a safe place for investment and trade seems to be vindicated by market trends.
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