Steady Inflation Offers Relief to UK Finance Minister Ahead of Budget

British inflation held steady in September, remaining at 3.8% for the third consecutive month, against forecasts of 4.0%. This stability offers some respite to Finance Minister Rachel Reeves ahead of her budget announcement in November. The services sector also saw stable inflation at 4.7%.

In a surprising turn of events, British inflation held steady at 3.8% in September, as released by the Office for National Statistics. This consistency provides some relief to Finance Minister Rachel Reeves before her upcoming budget in November.

Contrary to expectations from economists and the Bank of England, who predicted a rise to 4.0%, both overall inflation and the services sector rate held at previous levels, deviating from earlier forecasts.

The steady inflation data immediately impacted the currency markets, with Sterling falling against the U.S. dollar. The International Monetary Fund recently projected that by 2025-2026, Britain will have the highest inflation among the Group of Seven nations, further complicating the Bank of England's plans to moderate interest rates amid a cooling economy.

(With inputs from agencies.)