CPI inflation rise to 3.8%: what it means for the UK

CREATED BY ROGER EDDOWES Published: 18/09/2025 @ 09:00AM #CPIInflationRise #UKeconomy #ONSdata #CostOfLiving #BankOfEngland #SmallBusinessUK

Here are my thoughts on the CPI inflation rise to 3.8% and why it matters to both business and consumers. Prices are heating up before likely cooling off in a few months. Small firms should prep for volatility and policy shifts ...

CPI inflation rise, Prices climb to the skies, Wallets feel the squeeze

The latest ONS data shows the inflation rate ticking back up to 3.8%, and the CPI inflation rise lands at the highest level since January 2024, with summer holiday air travel adding heat. While this isn't a return to last year's extremes, it still nudges consumer prices higher and keeps households cautious.

That means another round of price sensitivity for essential
spending and a tricky balancing act for policymakers!

The Bank of England expects the headline rate to edge towards roughly 4% before easing back toward the 2% target, keeping a watchful eye on services and travel. This outlook implies inflation is sticky rather than spiralling, yet persistent enough to shape interest rate thinking. For borrowers and savers, the path looks choppy, not chaotic.

The timing matters, as the ONS released new data today (17th September 2025) and the MPC bank rate decision is following tomorrow (18th September 2025). If the data confirm the CPI trend, the Committee may feel less urgency to cut quickly. Equally, a softening in consumer prices would let them signal a gentler landing.

Small businesses will want to plan for short bursts of price pressure even as the medium‑term path moderates. Supplier quotes may creep up, especially in services linked to travel and logistics, while wage expectations track the headline inflation rate. Passing through costs to customers will require careful timing and clear communication.

The Finance Bill and November's Autumn Budget 2025 loom large, and fiscal choices could either cushion or compound the CPI trajectory. Targeted reliefs, investment incentives, or adjusted business rates would filter into pricing decisions and margins. Owners should scenario‑plan for at least three budget outcomes and stress‑test cash flow under each.

Cash discipline is still king while consumer
prices move unevenly!

I'm advising many of my clients to lock in key inputs, renegotiate energy and shipping where possible, and refine inventory to match demand volatility. A little operational rigour now can offset a surprisingly sharp monthly CPI print later.

Households will feel the cost-of-living pinch most in discretionary categories, with travel and leisure likely to stay noisy. For the UK economy, the near‑term story is resilience with frictions, not recession with freefall. Patience and precision beat panic when navigating a CPI inflation rise.

Ultimately, I believe the next two data points will frame sentiment: the ONS data update and the MPC signal on rates. If forecasts hold, inflation should cool into 2026, helped by steadier energy bases and calmer services.

Until then, I feel that disciplined pricing, tight cost control, and clear customer messaging are the best responses to this CPI inflation rise.

Until next time ...

ROGER EDDOWES
Join our mailing list! Click here and be one of the first to know when we publish a new blog post!

Share the blog love ...

Buffer Facebook Twitter Linkedin Pinterest WhatsApp #CPIInflationRise #UKeconomy #ONSdata #CostOfLiving #BankOfEngland #SmallBusinessUK

About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach. Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.

More blog posts for you to enjoy ...
		Speculation Over the Autumn Budget 2025: What Might Be Announced? Here's a quick take on the Autumn Budget 2025. Expect debate over borrowing, tax changes, and what HMRC may tweak, with winners and losers likely. Keep plans flexible while the chancellor weighs government spending needs ......
		Evidence Needed For Every Pension Tax Relief Claim From September 2025 As of 1st of September 2025, every Pension Tax Relief claim now needs evidence and can't be made by phone. Claims must be made online or by post, with self-assessment via the return. Here's what to provide and who can claim, ...
		The Massive Problem With 'Good In Theory' Tax Planning In today's blog post, I'll discuss why tax planning should be boring. Innovative tax strategies can backfire, and policy tweaks often hinder growth and savings. Practical, predictable rules will always beat flashy headlines ....
		HMRC Targets Personal Expenditure In Business Accounts This Tax Year HMRC will be targeting personal expenditure in business accounts with a new digital campaign and will make more enquiries. It wants clear, consistent apportionment and strong records. You should review your accounts before su...
		Disputed Employer PAYE Charges: Correct Your HMRC Tax Bill Did you know it's possible to challenge employer PAYE charges, identify payroll mismatches, and correct your HMRC tax bill? My blog post outlines what information to gather and how HMRC will respond to your dispute ......
		What's Changing For Employee Car Ownership Schemes And Company Vehicle Tax? HMRC is tightening the rules for employee car ownership schemes from October 2026. It also remains crucial to classify vehicles correctly for tax. This blog post explains both changes and what to do next ......
		Final Coins Featuring The Late Queen Enter Circulation As New Carolean Era Begins The final £1 coins featuring our beloved late Queen enter circulation as new King Charles III designs grow in number. Millions are heading for tills, pockets and collections. It's a tangible moment of change in Britain's ever...
		Employment Rights Bill Roadmap: SSP Changes From April 2026 The Employment Rights Bill roadmap confirms SSP reform from April 2026. If you're an employer, then take a look to see if your policies, budgets and systems align with the new rules. Wider measures will follow through 2026 an...

Other bloggers you may like ...
		Thoughtful Contractor Accommodation In Milton Keynes That Simply Works Posted by Emily Freeman on https://blog.shortstay-mk.co.uk Looking for contractor accommodation in Milton Keynes that's calm, secure, and practical? You'll get a whole apartment, fast WiFi, and parking, withou ...
		Common Goal Setting Mistakes And How To Fix Them Fast! Posted by Dave Cordle on https://blog.davecordle.co.uk Here's a clear take on some common goal setting mistakes and how to fix them. You'll get practical ways to sharpen focus, boost motivation, and keep m ...
		Networking: I Don't Do Small Talk! Posted by Jacky Sherman on https://www.jackysherman.com I wish I had a pound for every time I've heard that. It's a common reason given by people who dislike networking because they see the banality of talk ...
		UK Unveils Amnesty For Covid Loan Debtors: Your Last Clean-Slate Chance Posted by Helen Beaumont on https://blog.essendontax.co.uk Here's what the UK's amnesty for Covid loan debtors means for you. Pay back what you shouldn't have taken, no questions asked. Miss it, and expect tou ...