The consumer inflation rate in the United Kingdom (UK) remained at 3.8% for September, compared to expectations of an increase of 4.0%.
The data indicates that the price of goods and services continued to rise at a moderate pace, with core inflation also remaining at around 3.6% which excludes food and energy.
Rising prices in the transport and accommodation sectors were the main contributors, while food prices showed the slowest growth since the beginning of the year.
The Pound currency experienced a deterioration in performance, with a significant fall in value as soon as the data reading was published at the opening of the European session.
The market reacted to expectations that the Bank of England (BOE) is likely to cut interest rates as early as December.
Investors now estimate around 70% to 75% chance that the BOE will reduce interest rates from 4.00% to 3.75% to support economic growth.
This stable inflation provides some relief to consumers after the high price spike last year.
However, the bank is expected to continue to carefully monitor labor market developments and still-high wage growth, which could sustain inflationary pressures in the medium term.
Economic analysts believe that this disinflationary trend signals the beginning of a phase of price stability, although the long-term target of 2% is still far from being achieved.
The central bank is expected to reassess key economic data before making its next monetary policy decision next month.
