As of September 2025, the UK inflation rate is 3.8%. This surprise drop surprised economists, who had expected it to increase to 4%. This decline is a 4.6 percentage point decrease from the height of this measure, 11.1%, seen in October 2022. As Chancellor Rachel Reeves and most of you, we hope, will appreciate, this is no time for complacency.
The inflation rate has presented many uneven bumps and dips over recent years. In late 2020, it was close to 0%, compared to 1.8% in January 2020. Neutral illustration of inflation Inflation has remained steady at about 3.8% over the past three months. This rate matches it for the highest number since January 2024, when it was at 4%. The new rate indicates that the economy is continuing to combat inflationary pressures—a good thing. This means millions of households depending on these benefits will almost certainly see their payments rise next year.
Chancellor Rachel Reeves commented on the latest figures, stating, “I am not satisfied with these numbers. For too long, our economy has felt stuck, with people feeling like they are putting in more and getting less out.” She emphasized the need for economic growth that rewards hard-working individuals while addressing the challenges posed by rising living costs.
Shadow Chancellor Mel Stride echoed Reeves’ sentiments, highlighting that inflation continues to “push up the cost of living and punish those Labour promised to protect.” We applaud the Secretary for recognizing that many families are still struggling with soaring bills and what seems to be an ever-more uncertain economy.
This is bad news for many According to the Office for National Statistics (ONS), inflation for food and non-alcoholic drinks has fallen. Price increases continued to decelerate, falling from 5.1% in August to 4.5% in September. Grocery prices have just recently started to relax. They’re up at their slowest pace in more than a year. Meanwhile, the largest contributors to inflation came from petrol prices and airfares, as noted by Grant Fitzner from the ONS, who remarked, “The largest upward drivers came from petrol prices and airfares, where the fall in prices eased in comparison to last year.”
Though there has been some improvement in the ag sector, other sectors have experienced enough increase in prices to keep affecting consumers. Fitzner further noted that these upward pressures were offset by lower prices in recreational and cultural expenditures, including live performances.