UK inflation slowed to 3.6% in the year to October, in the last update before the upcoming Autumn Budget, the Office for National Statistics (ONS) has revealed.

The latest consumer price index (CPI) figure, which dropped from 3.8% in September, is the lowest it has been since June.

Month-on-month, the CPI rate increased by 0.4% in October, compared to 0.6% in October 2024.

The ONS stated that housing and household services made the largest downward contribution to the monthly change in the CPI rate, with food and non-alcoholic beverage offsetting this drop.

The latest inflation update comes ahead of the Autumn Budget, which will be announced by Chancellor Rachel Reeves on 26 November.

Chief sales and market officer at Phoebus Software, Richard Pike, said that after a year of increasing prices, the slowing of the inflation rate will come as a relief to under-pressure households.

He added: "It’s a much-needed pre-Budget boost for Reeves, who is looking for some rays of light on the economy amid the recent gloom. We’re all eagerly awaiting to see what she can pull out of the hat in next week’s budget to bring the economy back on track, with the Government’s position changing almost daily.”

However, personal finance analyst at Bestinvest, Alice Haine, said that while softening inflation will be comforting for some consumers, they are not out of the woods yet.

She concluded: “Inflation remains well above the BoE’s happy place of 2%, meaning people will continue to find it hard to maintain their living standards, especially as they face a heavier tax burden. Frozen income tax thresholds are dragging more taxpayers deeper into taxable territory as their pay increases.

“While Reeves is expected to stick to her manifesto pledge not to raise income tax, VAT or National Insurance, alternative options include extending the income tax threshold freeze to 2030, a move that will exacerbate the effects of fiscal drag.

"Higher and additional rate taxpayers could be hit hardest, amplifying financial strain as careers progress and incomes rise. Until there is clarity on what changes will be announced, the country remains in a state of paralysis, a situation compounded by the Budget’s later date than last year, with many delaying major life purchases, such as homes or cars, until they understand what the state of play is."

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