The UK’s latest inflation reading shows the annual CPIH rate holding at 3.8% in October 2025, according to new data published by the Office for National Statistics.
The figure is slightly lower than September’s 4.1%, continuing the gradual easing seen across the last few months. CPIH includes owner-occupiers’ housing costs and is one of the ONS’s main measures of price growth.
The data sits close to the broader inflation picture also reported by the ONS, where underlying pressures remain higher than the Bank of England’s 2% target. October’s reading suggests a slower pace of change heading into winter, with the next update due on 17 December.
What’s driving the 3.8% rate
ONS data shows the biggest upward pressure in October came from food and non-alcoholic beverages, where inflation rose to 4.9%, up from 4.5% in September. Stronger price growth also appeared in restaurants, hotels and recreation services.
These increases were partly offset by a smaller rise in housing and household services, where lower energy costs compared with last year continued to cool the overall rate. Motor fuels rose 1.4% in the year to October, a modest increase that had limited impact on the headline figure.
CPI vs CPIH
Alongside CPIH holding at 3.8%, the standard CPI measure eased to 3.6% in October, down from 3.8% in September.
CPIH remains slightly higher because it includes owner-occupiers’ housing costs, which continue to rise at a steady pace. Both measures remain well below the peaks of 2022 and 2023, but above the Bank of England’s 2% target.
The latest release shows inflation well below the levels seen through 2022 and 2023, when rising energy and food prices pushed CPIH near double digits. The current rate reflects a period of weaker energy costs and more moderate increases across household goods and services.
Retailers continue to operate in a mixed environment. Food prices remain elevated in several categories, while other areas such as clothing, household goods and some services show softer growth than earlier in the year. The combination keeps overall inflation above target but far below the crisis levels of the past two years.
How retailers are feeling it
Supermarkets and suppliers are still managing uneven cost pressures. Fresh food, meat and soft drinks remain higher year-on-year, while household goods and clothing continue to show slower price growth.
Retailers say the environment is more predictable than last year, but input costs have not fallen enough to trigger broad price reductions for consumers.
The ONS data series also shows a long-term downtrend from the October 2022 peak of 9.6%. The slow return toward more stable inflation indicates continued pressure but more predictable cost movements for households and businesses.
What it means for the Bank of England
The 3.8% reading reinforces expectations that inflation will drift lower into early 2026, but not fast enough for the Bank of England to move quickly on rate cuts.
Markets are watching the November data closely, as a sharper fall would increase pressure on the MPC to soften its higher-for-longer approach.
The next inflation update from the ONS will cover November 2025 and is scheduled for release on 17 December. That reading will set the tone for the end-of-year economic outlook and expectations for early 2026.
Why it matters
The CPIH 3.8% reading confirms that UK inflation is easing but not yet back to target.
It signals a more stable cost environment for retailers, suppliers and consumers after two years of volatility.
The October figure also shapes expectations for the Bank of England’s decisions going into 2026.
Editor’s Note: This article is based only on official ONS data from series L55O (CPIH Annual Rate, All Items, 2015=100), published on 19 November 2025. No estimates or additional figures have been added.
