UK inflation remained at 3.8% in the year to September, staying at the same level as July and August, the Office for National Statistics (ONS) has revealed.

The latest figure remains the highest inflation rate since January 2024, when annual price growth stood at 4%.

Month-on-month, there was no inflation growth in September, after rising by 0.3% in August.

The latest inflation update is the penultimate announcement ahead of the Autumn Budget, which will be delivered on 26 November.

Personal finance analyst at Bestinvest, Alice Haine, said that while the latest update may provide some comfort for consumers, it still remains almost double the Bank of England’s (BoE) target of 2%.

She stated: "Sticky inflation will prolong the pain for households already grappling with post-pandemic increases to living costs. It also poses a challenge for Chancellor Rachel Reeves as she prepares her Autumn Budget. Persistently high inflation, mixed with sluggish economic growth and a struggling jobs market, only adds to the pressure as she considers which taxes to target to plug the black hole in the public finances."

Senior investment analyst at Hargreaves Lansdown, Hal Cook, suggested that the latest data adds some confusion around further base rate cuts later in the year.

He concluded: "We think the market has overreacted this morning: inflation at 3.8% is still nearly double the BoE target and Andrew Bailey has been clear that future rate cuts will be made in a considered fashion and data driven. He hasn’t appeared to be in a rush to cut so far.

"There is also a risk that the upcoming Budget towards the end of November could change things. It’s therefore unclear whether the BoE will look to cut at their next meeting or wait to see what comes out of the Budget before cutting further – remember that they have already cut rates three times in 2025, taking them from 4.75% at the start of the year to 4% today. While a cut in November is more likely after this latest inflation data, it’s by no means guaranteed."

---