MNI UK Inflation Insight: October 2025

For the full MNI UK Inflation Insight, click here.

• Headline CPI at 3.56% in October was very close to the Bank of England forecast, coming in only 4 hundredths below BOE’s forecast. The MNI median (and Bloomberg consensus) had been looking for a 3.5%Y/Y print (rounded to 1dp), so there was a very marginal upside surprise here (but of course note that at 3.56%Y/Y, the print was close to rounding down and coming in line with consensus expectations).
• This also follows softer labour market data last week. There is still uncertainty over next week's Budget but this data does remove another potential hurdle for Governor Bailey to help deliver a December cut.
• Food prices were a tenth below BOE forecasts but 2 tenths above sellside expectations (who still look for softer food prints through the remainder of the year than the BOE). We look at how there has been little progress on food prices coming off their peak over the past few months.
• Air fares was in focus again and came in at the bottom of analyst expectations. We think that up to 0.05ppt of the downside seen from transport services in the October headline CPI print could be reversed in November (around double that for services CPI).
• Elsewhere within services, accommodation softens, tuition fees increase, cultural services reverse weakness.
• Restaurants and cafes finally see the Y/Y price growth rate increase above 4.2%, printing 4.4%Y/Y. This is something we have been very focused on as we think it is indicative of the pricing power of consumer discretionaries. We will be watching over the next couple of months as we enter the busy Christmas party season for any further acceleration.