UK inflation hit 3.5% in September, its highest since October 2025, driven mainly by rising petrol and diesel costs. The increase comes ahead of Chancellor John Healey's Budget, adding pressure as government borrowing also rose sharply.
01Summary
- 01Inflation rose to 3.5% in the year to September, up from 3.1% in August, the fastest pace since October 2025.
- 02Petrol prices climbed 8.2p per litre to 169.5p, the highest since August 2022, and diesel reached 192.5p per litre.
- 03Government borrowing hit nearly £25bn in September, £1.8bn higher than a year earlier, driven by rising debt interest costs.
- 04Chancellor John Healey cited conflicts in the Middle East and Europe as the cause of rising fuel costs, ahead of the Budget on 28 October.
- 05Ruth Gregory of Capital Economics said the borrowing figures 'painted a dismal picture' and suggested a cautious Budget.
02Why it matters
Higher inflation means rising costs for households, particularly at the petrol pump, and tighter fiscal constraints for the government ahead of the Budget, which could affect public spending and tax decisions.
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