Latvala's victory, his second in succession in Britain and first for seven months, ended a run of five in a row by Frenchman Loeb dating back to Argentina in April.
Norwegian Petter Solberg was third for Ford, ahead of compatriot Mads Ostberg.
With three rounds remaining, Loeb has 219 points to Citroen team mate Mikko Hirvonen's 158 and the champion looks likely to wrap up his defence of the title on home asphalt in France next month.
Hirvonen, fifth on Sunday but winner of the closing power stage for three bonus points, is now the only man who can deny Loeb mathematically and the chances of him ruining the French party are remote.
Latvala, whose last win was in Sweden in April, again dominated on the slippery Welsh forest mud and gravel tracks and had led since Friday's third stage. He won by 27.8 seconds.
"This win means a lot to me," Latvala said after the 10th round of the season. "Rally GB is like a second home event because I started my career here 10 years ago and I have more experience of this event than my own rally in Finland.
"We had some doubts about our speed after the previous gravel rally but we came back strongly," added the 27-year-old.
"The car has been so fast all season but we've had too many disappointments and finally we delivered the result we deserved."
Loeb had a harder time to clinch second place after battling Solberg all the way to the finish, beating the Norwegian by 0.9 seconds after 325km and 19 stages.
Russian Evgeny Novikov was sixth in a Ford.