UK inflation has fallen for the first time in over a year. It dropped from 3.8% in September 2023 to 3.6% in October 2025. This change could bring consumers a little bit of sunshine. That certainly doesn’t mean that skyrocketing costs across numerous other sectors will come to an end. Today’s new numbers show that inflation still affects the daily costs of living, especially in food and energy, keeping the squeeze on family budgets.
The Office for National Statistics (ONS) uses that information to produce one of the most important economic statistics in the UK — our monthly inflation rate. They monitor about 700 different products and services that constitute a typical ‘basket’ of products. Essential staple foods including bread, fruit, vegetables, dairy and meat have increased the most, with price surges of over 20. These dramatic increases have outpaced the general inflation rate during that same time period of the past year. For a majority of low- and moderate-income households, this translates to their spending power being additionally pinched.
Understanding Inflation Trends
The recent inflation figures reveal an important trend: while the headline rate has decreased, it is far from zero. It would take inflation being 0% for prices to stabilize at this point. As it currently stands, this is little more than a pipe dream, and consumers are suffering the consequences. On average, this means something that cost £100 a year ago now costs about £103.60. This may seem like a small incremental increase, but the impact compounds dramatically over the long-term.
Energy costs also present a complicated picture. Meanwhile, energy bills are down from their 2023 high. Everyday Americans continue to pay far more for gas and electricity than they were prior to the crisis. This case is a perfect example of how outside forces beyond the control of government can drive inflation and household costs.
People need to focus on their own circumstances when determining inflation’s effects. There’s no one-size-fits-all for how each household spends their money. Households that spend a larger share of their income on food or energy might experience personal inflation rates that are much higher than the official Consumer Price Index (CPI) indicates.
Strategies for Managing Rising Costs
With continued inflationary pressures, these experts suggest a few key tactics to ensure consumers continue to make the most of their money. The no-brainer Everybody on the advice circuit seems to agree on this one—reel providers into a fixed-rate tariff. Outfox Energy comes out with a 12-month fixed offer, with an average annual bill of £1,570. This will save households £188 on average compared to the current price cap from January.
Moreover, budgeting can be an essential part of managing costs. Determining a weekly budget and creating a shopping list are effective tactics. In this way, they help you avoid impulse purchases and prevent overspending. Choosing own-brand products is another simple approach to save money without losing out on quality. Even discount supermarkets have been able to introduce lower-priced options that are affordable and drive value without sacrificing quality on what consumers want.
Buying in bulk is usually a better deal when the bulk discount isn’t an illusion. Additionally, seasonal or frozen fruits and vegetables are almost always more cost-effective than fruits and veggies purchased out of season. These commonsense solutions help consumers make wiser choices at home, which is critical as families do their best to cope with climbing inflation.
The Role of Investments in Tough Times
Millions of people just like you are looking to invest in different asset classes to safeguard their fortunes. They’re especially worried about the ever-present danger of inflation. Gold has always been the most reliable hedge against inflation. That’s because its value is hard-wired to increase when the purchasing power of money declines. This feature is precisely what makes gold such a desirable asset for people who want to protect their wealth during times of market chaos.
Putting money in equities is another good hedge against inflation. Long-term, equities have generally beaten the inflation rate, creating long-term growth prospects that can help investors stay ahead of rising prices. It is incredibly important that people think responsibly about how they invest their money. We always recommend speaking with a qualified financial advisor before making any major life decisions.