LONDON (AP) - Inflation in the United Kingdom unexpectedly remained steady in the year leading up to September, according to official figures released on Wednesday. This stability, characterized by a 3.8% annual increase in consumer prices, has sparked optimism regarding a potential reduction in interest rates at the next Bank of England meeting.

The Office for National Statistics reported that the consumer price index (CPI) maintained the same 3.8% inflation rate for the third consecutive month. Many economists had projected an increase to 4%, a figure that would have been significantly above the Bank of England's inflation target. The unchanged inflation rate suggests that the expected pressures on consumer prices may have peaked, easing concerns among policymakers.

Martin Sartorius, principal economist at the Confederation of British Industry, indicated that despite the current stabilization, he anticipates only a gradual easing of price pressures in the following months. He stated, "Price pressures should begin to slowly ease in the coming months, but we are unlikely to see a more substantial downshift in inflation until the first half of next year."

This unexpected flat reading on inflation essentially reinforces the argument for a possible interest rate cut at the upcoming policy meeting scheduled for November 6. The Bank of England had previously maintained its main interest rate at 4% in light of persistent inflation concerns, which have been a significant factor affecting economic policy decisions.

The September inflation figures also have implications for Treasury Chief Rachel Reeves as she prepares for a crucial budget statement set for November 26. This budget is anticipated to include further tax increases. Given that the inflation rate for September is utilized to determine welfare benefits for the following year, the stagnant inflation rate means that the costs associated with these benefits may be lower than previously expected.

Overall, economic analysts view the steady inflation rate as a sign that inflation may be stabilizing, providing grounds for optimism regarding potential future monetary policy adjustments. As the Bank of England considers its upcoming interest rate strategy, the data could have a significant impact on both economic growth and public confidence.