UK Inflation Drops to 3.6% in October, Increasing Likelihood of Christmas Rate Cut

Written by Emily J. Thompson, Senior Investment Analyst

Source: CNBC

Updated: Nov 19 2025

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Source: CNBC

U.K. Inflation Rate: The U.K.'s inflation rate decreased to 3.6% in October, driven by lower gas and electricity prices, with core inflation slightly down to 3.4%.
Chancellor's Response: Chancellor Rachel Reeves welcomed the decline in inflation but emphasized the need for further measures to address living costs, promising to outline plans in the upcoming Autumn Budget.
Economic Outlook: Economists anticipate a potential interest rate cut by the Bank of England in December, as inflation cools and economic growth remains sluggish, with the U.K. economy growing only 0.1% in the third quarter.
Future Considerations: The upcoming Autumn Budget is expected to provide insights into tax changes and measures that could influence inflation, with analysts speculating on the impact of potential cuts to VAT and green levies on energy bills.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.