By Jason Douglas

LONDON--Annual inflation in the U.K. held steady in October, as weak growth in prices for food and drink counterbalanced surging fuel costs.

The figures suggest the Bank of England remains on track to lift interest rates next year provided the U.K.'s exit from the European Union goes smoothly.

Consumer prices rose 2.4% on year in October, matching the increase in September, the Office for National Statistics said Wednesday.

The BOE signaled this month that it will need to nudge up interest rates two to three times in the next three years to bring inflation back to its 2% goal.

Officials said the outlook for monetary policy depends on whether Britain can agree terms for its withdrawal from the EU by the planned exit day in March next year. An abrupt and messy departure would likely cause widespread economic disruption and scramble the BOE's plans.

Worries that the U.K. could crash out of the bloc without a deal have risen in recent months as negotiators from London and Brussels have struggled to finalize terms with just five months left on the clock.

In a reflection of that nervousness, the ONS said Wednesday that house prices in London fell on the year in September for the third straight month. The last time that happened was in 2009, when the country was in the grip of a financial crisis that crippled many of the world's biggest banks.

Prime Minister Theresa May is on Wednesday hoping to persuade her divided cabinet to back a draft withdrawal agreement hammered out with Brussels. She must then convince other EU leaders and her own fractious parliament to approve the proposals to smooth the path of its departure from the bloc.

Write to Jason Douglas at Jason.Douglas@wsj.com

(END) Dow Jones Newswires

November 14, 2018 04:52 ET (09:52 GMT)