LONDON – Inflation in the United Kingdom remained unchanged in September, defying expectations. While fuel prices surged, this was counterbalanced by a decline in food costs, according to official data released on Wednesday, fueling optimism for a possible interest rate cut in the near future.

The Office for National Statistics reported that consumer prices increased by 3.8% over the past year, maintaining the same rate observed in the previous two months.

Many analysts had anticipated a rise to 4%, which would have been twice the Bank of England’s target rate.

The stability in the inflation rate has reinforced the central bank’s belief that inflation may have peaked and could gradually move closer to their target in the upcoming months.

Martin Sartorius, the principal economist at the Confederation of British Industry, noted, “We expect price pressures to gradually diminish in the months ahead, but a more significant reduction in inflation is unlikely before the first half of next year.”

He added that the “downside surprise” in inflation raises the possibility that the central bank may cut interest rates again at its next policy meeting on Nov. 6. Last month, it held its main interest rate at 4% as U.K. inflation concerns weighed on policymakers.

The inflation figure will also be welcomed by Treasury chief Rachel Reeves as she prepares to deliver a crucial budget statement on Nov. 26, which is expected to see taxes rise again. September’s inflation rate is used to link welfare benefits for the upcoming year, so the cost of funding that will be lower than anticipated.