Inflation unexpectedly holds at 3.8 per cent ahead of Rachel Reeves' £2bn 'Budget tax raid on middle classes'

Experts had widely predicted that inflation would reach a peak of 4% in September before starting to fall. It remained at 3.8% today.

It marks the third successive month that the rate remained unchanged, and the 12th month in a row that inflation is nearly double the Bank of England's 2 per cent target.

The Chancellor is considering a £2billion raid on middle-class professionals such as lawyers, accountants and family doctors as she scrambles to balance the books in next month’s Budget.

She is expected to use the budget to impose a new charge on people who use limited liability partnerships as she tries to fill a £30 billion hole in the public finances. This is expected to hit middle-class professionals such as lawyers, accountants and family doctors.

They are not subject to employer’s national insurance as partners are treated as self-employed. The chancellor is also said to be considering an annual levy on the most expensive homes or subjecting them to capital gains tax- a so called ‘mansion tax’.

However some experts are urging her to focus on slashing spending instead.

The chancellor wants “those with the broadest shoulders” to pay more tax.

According to predictions, a solicitor in a partnership earning £316,000 would face extra taxes of £23,000-a-year.

Read more: Reeves 'to target GPs, lawyers and accountants in tax raid' to fix Budget black hole

Read more: Rachel Reeves refuses to rule out tax hikes ahead of autumn budget

Rising petrol and airfare prices last month were offset by easing food and drink costs, which fell for the first time since May last year.

While the overall cost of food fell, the price of beef has increased - jumping to 27.5 per cent in the year to September, up from 25.7 per cent in August.

Inflation is the rate of prices increases over time, measured by tracking the costs of a selection of goods compared to the year before.

September's figure is particularly important because it helps inform how much benefits go up next year.

"A variety of price movements meant inflation was unchanged overall in September," said ONS chief economist Grant Fitzner.

"The largest upward drivers came from petrol prices and airfares, where the fall in prices eased in comparison to last year.

"These were offset by lower prices for a range of recreational and cultural purchases including live events. The cost of food and non-alcoholic drinks also fell for the first time since May last year."

The figures will be good news for those hoping for interest rate cuts, as rates remain high to stem spending and slow price rises.

Core inflation, which strips out volatile elements such as fuel and energy, also fell from 3.6 per cent in August to 3.5 per cent in September.

Services inflation, which is largely driven by wages, held stead at 4.7 per cent - below the 4.9 per cent forecast by analysts.

But Rachel Reeves said she was "not satisfied with these numbers", adding: "For too long, our economy has felt stuck, with people feeling like they are putting in more and getting less out.

"That needs to change. All of us in government are responsible for supporting the Bank of England in bringing inflation down."

Inflation is often dictated by factors outside the government's control, such as wars and global economic conditions.

However, the Chancellor has been blamed for price rises this year after imposing additional minimum wage and national insurance costs on businesses in her 2024 Budget.

"I am determined to ensure we support people struggling with higher bills and the cost of living challenges, deliver economic growth and build an economy that works for, and rewards, working people," Ms Reeves added.