UK inflation hit 3.5% in September, its highest in a year, driven by soaring motor fuel costs and complicating the fiscal outlook ahead of the Autumn Budget.
01Summary
- 01Inflation rose to 3.5% in the 12 months to September, above the 3.4% forecast by economists polled by Reuters.
- 02Motor fuel inflation reached its highest level since August 2022, with prices surging 29.8% year-on-year.
- 03Markets price a 98% chance the Bank of England will raise its key interest rate by 25 basis points to 4% next month.
- 04UK national debt exceeded £3 trillion for the first time in September, according to data published Wednesday.
- 05Chancellor John Healey said he will maintain fiscal discipline in next week's Autumn Budget while aiming to support growth.
02Why it matters
Rising inflation increases the likelihood of further interest rate hikes, raising borrowing costs for households and businesses, and pressures the Chancellor to balance cost-of-living support with fiscal discipline in the upcoming Budget.
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