This is down from 3.8% recorded in the year to September.
The latest Consumer Price Index measure released by the Office for National Statistics largely reflects a downward effect from gas, where prices rose by 2.1% in the 12 months to October 2025, compared with a rise of 13.0% in September 2025. Monthly gas prices, meanwhile, rose by 0.9%, compared with a rise of 11.7% a year ago.
There was also a downward effect from electricity, where prices rose by 2.7% in the 12 months to October 2025, compared with a rise of 8.0% in September 2025. Monthly electricity prices rose by 2.4% compared with a rise of 7.7% a year ago.
This resulted from a change in the Office of Gas and Electricity Markets (Ofgem) energy price cap in October 2025.
The falls in price growth were partially offset by rising food inflation which rose to 4.9% from 4.5% in September.
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Core inflation, which excludes volatile items such as food, alcohol and tobacco, eased to 3.4% in October from 3.5% in September along with services inflation which dipped to 4.5% from 4.7%.
Impact on interest rates
Economists say this latest easing of inflation could move the Bank of England to cut the base rate.
“Slowing inflation strengthens case for a December interest rate cut” says Yael Selfin, chief economist at KPMG UK.
“Today’s data is positive for the Bank of England, with both headline and underlying inflation easing. With further progress on disinflation and softer signals from the labour market, a final rate cut is expected at the December meeting.
“Upside risks to the inflation outlook stemming from the upcoming Budget have receded, with growing indications that the Chancellor will look to plug the fiscal gap through higher taxes on households. On balance, we expect these taxes to slow domestic demand, which should support continued downward momentum for inflation over the coming year.”
Selfin added that inflation was expected to ease gradually over the coming months, with a return to the 2% target projected by mid 2026.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: “The latest inflation reading aligns with the Bank of England’s forecast that inflation peaked in September, though the figure remains elevated and well above the central bank’s target of 2% – a level not seen in over a year. While softer inflation may give Chancellor Rachel Reeves some breathing space ahead of the Budget, weak economic growth, a struggling jobs market and low consumer confidence continue to pose challenges.
“Softening inflation will be comforting for consumers, but they are not out of the woods just yet. While the headline inflation figure has eased, prices are still rising – just at a slower pace. The runaway price rises seen during the cost-of-living crisis are already baked into household budgets, and with a potentially painful fiscal statement loaded with tax hikes just a week away, households are understandably nervous.”
