British inflation and a key underlying measure of price growth both unexpectedly held steady in September, official figures showed, offering some relief to chancellor Rachel Reeves ahead of her November budget.
The annual rate of consumer price inflation remained at 3.8 per cent for the third month running, the Office for National Statistics said on Wednesday.
Most economists polled by Reuters and the Bank of England had expected a rise to 4.0 per cent.
Inflation in the services sector remained at 4.7 per cent in September, the same rate as in August and below the Reuters poll forecast of 4.9 per cent.
British inflation will be the highest among the Group of Seven economies in 2025 and 2026, the International Monetary Fund said last week, hampering the BoE's slow progress in cutting interest rates to help the slow economy.
The BoE expects British consumer price inflation to gradually weaken but only hit its 2 per cent target in the April-to-June period of 2027.
Britain's labour market is losing steam but policymakers at the central bank are split on how much inflation pressure remains in the economy, with inflation expectations among the public rising in recent months.
The rate of food and drink inflation came down from 5.1 per cent in August to 4.5 per cent in September.
James Walton, Chief Economist at IGD, noted that this aligns with their predictions that food inflation will start to moderate. "Whilst this is good news, prices for shoppers are still going up year on year, just more slowly," he added. "This means food price inflation is outstripping the general cost of living. Food and drink prices remain a significant problem for a lot of households, and we will continue to see this being reflected in muted shopper confidence and careful shopping behaviours."