UK inflation slowed to 3.6% in the year to October, but households are feeling the squeeze as food prices have risen again after a dip in September.
The Office for National Statistics said prices are rising at their slowest pace for four months, helped by smaller increases in household energy bills and lower hotel costs.
The figures come a week before the Government’s Budget. Chancellor Rachel Reeves said she is “determined to do more to bring prices down”, acknowledging that inflation and living costs remain a burden for families.
Reeves has signalled that easing cost-of-living pressures will be central to the Budget, which is expected to mix tax rises with spending cuts to repair public finances.
Food and non-alcoholic drinks put the most upward pressure on prices. Annual food inflation rose to 4.9% in October, from 4.5% in September. Bread, meat, fish, vegetables, chocolate and sweets all became more expensive, though fruit prices edged down.
Lower inflation means prices are rising more slowly, raising hopes that the peak has passed and interest rates could start to fall. Inflation remains above the Bank of England’s 2% target, and the Bank’s next decision on 18 December will focus on the impact of earlier rate rises.
ONS chief economist, Grant Fitzner, said gas and electricity bills increased less than a year ago, helped by a smaller rise in Ofgem’s energy price cap. Hotel prices fell more than usual, although higher fuel, raw material, and regulatory costs are still being passed through to shop prices.
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