Commenting on today’s data from the Office for National Statistics that showed the annual rate of CPI inflation holding at 3.8% in September 2025, unchanged from 3.8% in August, Anna Leach, Chief Economist at the Institute of Directors, said:

“Lower than expected inflation will bring welcome relief to the Monetary Policy Committee, who have been split on the outlook. We should now be passed the peak of this inflationary cycle for consumers. Weaker energy price inflation and the steady slowdown in wage growth – a key driver of services inflation – should help sustain a further easing in price pressures. But food price inflation is set to carry on rising, which bears with it risks to the outlook.

“The MPC seems likely to hold fire on rates in their next meeting, which falls ahead of the Budget. Price signals remain mixed, with higher price expectations counterbalanced by a weak labour market and subdued confidence amongst businesses and consumers. Given the impact that last year’s Budget had on inflation and confidence – especially through higher employer costs – any rate move is likely to be parked for now.”

Representing the CBI, Martin Sartorius, the organisation's Principal Economist, commented: “Inflation came in lower than expected in September, bringing some relief to hard-pressed households, though it remains well above the Bank of England’s 2% target. Price pressures should begin to slowly ease in the coming months, but we are unlikely to see a more substantial downshift in inflation until the first half of next year.

“Today’s downside surprise raises the possibility that a rate cut by the Bank of England’s Monetary Policy Committee could be back on the table in November. While some MPC members may prefer to keep rates on hold given the recent uptick in inflation expectations, September’s softer reading could give the broader Committee greater confidence to reduce rates without risking further persistence in price pressures.”

David Bharier, Head of Research at the British Chambers of Commerce, said:  “Sticky inflation has been in danger of becoming a uniquely British disease as the UK continues to stand out from the rest of the G7.

“Today’s CPI rate of 3.8%, coming in lower than expected, could provide some reassurance that we are at the peak, as expected by the BCC and Bank of England. However, the picture is mixed. Core inflation has slowed, but the reintroduced producer price data show factory gate prices rising at 3.4%, hinting that cost pressures remain in the pipeline, particularly for food and manufacturing.

“Our latest survey data shows that concern about inflation has been rising again and is now the second biggest issue for firms after taxation. But the two are closely linked: for the past year, businesses have told us that the rise in employer National Insurance Contributions has fed directly into price pressures and weakened investment. Labour costs continue to be the main cost pressure, cited by 72% of businesses.

“Higher energy bills are also a concern, cited by 50% of firms, with the rise in the energy price cap at the start of October indicative of the sustained pressure. Without action to support firms bring down costs, there is a risk of a repeat of a 2022-style energy shock.

“The upcoming Budget will be pivotal. Further tax rises could exacerbate a climate of low growth and rising costs. Unlocking growth through increased investment in infrastructure, AI adoption, and a bold push to increase exports, is the only long-term solution.”