UK Inflation Eases in October 2025 as CPI and CPIH Growth Slows
The latest data from the UK’s Office for National Statistics (ONS) shows a slight easing in inflation in October 2025, with both the Consumer Prices Index including owner occupiers’ housing costs (CPIH) and the Consumer Prices Index (CPI) recording slower annual growth compared to September.
Headline Inflation Figures
CPIH rose 3.8% in the 12 months to October 2025, down from 4.1% in September. On a monthly basis, CPIH increased 0.4% in October, compared with a 0.6% rise in October 2024.
CPI rose 3.6% annually in October, down from 3.8% in September, while the monthly increase was 0.4%, matching the CPIH monthly trend and slightly lower than the 0.6% increase recorded in October 2024.
These figures suggest that inflationary pressures are easing slightly, though consumer prices continue to rise steadily.
Drivers Behind the Change
Analysis of the data shows that housing and household services were the main contributors to the downward movement in inflation rates, reflecting slower growth in rents, utilities, and other household costs.
In contrast, food and non-alcoholic beverages provided the largest upward pressure, indicating that grocery prices continue to climb, offsetting some of the easing in housing costs.
Core Inflation Trends
Economists often focus on core inflation, which excludes volatile items such as energy, food, alcohol, and tobacco, to gauge underlying price trends.
Core CPIH rose 3.7% annually in October, down from 3.9% in September, with the CPIH goods rate falling from 2.9% to 2.6%, and services slowing from 4.9% to 4.6%.
Core CPI also eased, increasing 3.4% annually, down from 3.5% in September. The CPI goods rate fell from 2.9% to 2.6%, while CPI services slowed from 4.7% to 4.5%.
The moderation in core inflation indicates that while price pressures are still present in the economy, the rate of increase is gradually slowing.
What This Means for the UK Economy
The slowing CPI and CPIH figures provide a mixed signal for policymakers. On one hand, the easing in housing and service costs suggests that inflation is gradually coming under control, which could reduce pressure on the Bank of England to implement further aggressive interest rate hikes.
On the other hand, the continued upward pressure from food and beverage prices means that households are still facing significant costs in everyday essentials.
Analysts say that core inflation figures are crucial, as they reflect underlying trends beyond temporary spikes in volatile sectors like energy and groceries. The continued slowdown in core CPIH and CPI services and goods provides some reassurance that inflationary pressures may be moderating across multiple sectors.
Looking Ahead
Economists will continue to monitor upcoming UK economic indicators, including wage growth, retail sales, and energy prices, to assess whether this trend of easing inflation will continue. For households and businesses, the slower growth in CPI and CPIH may offer a modest relief, but the cost of living remains a concern due to persistent price increases in food and non-alcoholic beverages.
The Bank of England is likely to factor these figures into future monetary policy decisions, balancing the need to keep inflation under control while supporting economic growth.
Takeaway
October 2025’s inflation data suggests that UK price pressures are beginning to ease, with both CPI and CPIH showing slower annual growth. While housing and household service costs have moderated, food prices continue to rise, highlighting ongoing challenges for consumers.
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