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UK Budget Expected to Cut Inflation by 0.5%

12/10/2025

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Story summary
  • Bank of England deputy governor Clare Lombardelli says the Budget could lower inflation by as much as 0.5% next year.
  • Measures capping fuel duty, cutting energy prices, and freezing rail fares take effect from April 2026.
  • The Office for Budget Responsibility forecasts a 0.4% inflation reduction.
  • Inflation is currently 3.5% and is expected to fall to 2.5% next year.
  • Lombardelli says the Budget's impact on economic growth would be minimal.