“While these figures do little to suggest an easing of the financial squeeze on households and businesses, this unexpectedly restrained reading suggests that inflation has now peaked as lower food costs helped keep the headline rate unchanged.
“September’s outturn is likely to have been followed by a slight slowdown this month with the downward pressure from a smaller rise in October energy bills, compared to a year ago, likely to pull headline inflation moderately lower.
“Though it’s probable that inflation has peaked, there is a real risk that these still high price pressures become more entrenched as September's figures are used to uprate numerous key costs, including benefit payments and firms’ business rate bills.
“Despite softer than expected inflation, the chances of a November rate cut are hanging by a thread, particularly as rate-setters will likely want to analyse the inflationary impact of any measures announced in the Budget before relaxing policy again.”
ENDS
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