UK inflation at 3.8% in September; BoE likely to hold rates at 4% in November.

The Bank of England is expected to hold interest rates at 4% in its next decision, with most economists viewing the outcome as a close call. Recent data showed UK inflation steady at 3.8% in September, below forecasts, driven by lower food and energy prices, sparking debate over a potential rate cut to 3.75%. While some analysts cite easing wage growth and weakening inflation pressures as signs of progress, many remain cautious, noting inflation remains well above the 2% target and underlying pressures could persist. Policymakers are likely waiting for clearer evidence of sustained disinflation before acting, possibly delaying a move until after Chancellor Rachel Reeves’ November 26 Budget, which may introduce fiscal tightening that could further reduce demand. Despite some optimism, a rate cut in November appears unlikely, with most experts expecting rates to stay unchanged for now.