Price rises set to cool in reprieve for households after September peak

Price rises could be cooling off across the UK after inflation peaked in September, offering some relief to households, experts believe.

Economists think the rate of Consumer Prices Index (CPI) inflation will have fallen in October, when official statistics are published on Wednesday.

It comes after the Bank of England said last week that it thinks inflation has “peaked” and will begin to come down.

CPI came in at 3.8% in September, remaining at the same level as both July and August, the latest data from the Office for National Statistics (ONS) showed.

Some economists are expecting CPI to fall to 3.5% in October.

Elevated food and drink inflation has helped put pressure on the overall rate this year, with households seeing steep rises particularly for items such as chocolate, coffee, cheese and eggs.

However, the cost of food and non-alcoholic drinks fell between August and September, the first monthly decline since May last year.

Experts think food price inflation could continue to ease in October.

Furthermore, energy costs are expected to be an important factor putting downward pressure on the overall inflation rate.

Ofgem raised the energy price cap by 2% in October, but this is significantly less than the 9.6% hike last year, meaning energy price inflation is set to fall.

Jack Meaning, chief UK economist for Barclays, said he thinks September “represented the peak of the inflation hump” and that CPI will fall to 3.5% in October.

Robert Wood and Elliott Jordan-Doak, UK economists for Pantheon Macroeconomics, also said they were forecasting inflation to ease to 3.5%, driven by energy costs.

But they also cautioned over a hike in university tuition fees, particularly for international students, putting upward pressure on inflation last month.

Sanjay Raja, chief UK economist for Deutsche Bank, predicts a smaller fall in overall inflation to 3.7% in October.

But he said that the upcoming autumn Budget was likely to mark the “next most important inflation forecast update”, with the potential for tax rises pushing down on inflation.

“Speculation around lower energy bills, indexation costs, duties and food prices remain rife,” Mr Raja wrote in a research note.

“We expect the Chancellor to push through some modest measures to pull down on prices come November 26.

“This will give us a good sense of where 2026 inflation will land.”