MNI UK Inflation Preview: October 2025

For the full MNI UK CPI Preview, including summaries of sellside views click here.

• Governor Bailey’s vote at the December MPC meeting is still far from guaranteed despite last week’s soft labour market data. We still think that assuming data comes in broadly in line with expectations and we don’t have an inflationary Budget that Bailey will vote to support a cut at the December MPC meeting, which would hence see a 5-4 vote for a pre-Christmas 25bp cut.
• The BOE November MPR forecast looks for headline CPI to come in at 3.60%Y/Y – this forecast is 11 hundredths below the August MPR expectation following a 21 hundredth downside surprise in September. The analyst previews that we have read look for a median around a tenth lower at 3.51%Y/Y (although note that most of the analyst forecasts are only to 1dp).
• 13/18 analyst previews that we have read (over 70%) look for headline CPI to round to 3.5%Y/Y (or lower) while only 2/18 look for an upside surprise for the BOE (rounding to 3.7%Y/Y).
• With sellside expectations skewed towards a softer print, and markets pricing in 18bp for the December meeting, we think that an upside surprise to the BOE’s forecast would therefore likely cause a larger market move than a downside surprise.
• For the October print, air fares provide the largest uncertainty while analysts expect food prices to come in lower than the BOE’s forecasts. Education and cultural services are likely to contribute positively to services CPI while rental and accommodation prices are expected to soften. We continue to see restaurant prices as a key barometer of the pricing power of consumer discretionary firms. We look into the details for all of these components in our preview.