UK inflation climbed to 3.5% in September, driven by higher petrol and diesel prices, and is expected to rise further in the coming months.
01Summary
- 01The Consumer Prices Index (CPI) rose to 3.5% in the year to September, the highest rate in nearly a year.
- 02Petrol and diesel prices increased by 29.8% compared to September last year, pushing inflation above the Bank of England's 2% target.
- 03Core CPI, which excludes food and energy, stood at 2.8% in the 12 months to September 2026.
- 04The Bank of England cut interest rates six times between August 2024 and June 2026, leaving the base rate at 3.75%.
- 05Prime Minister Andy Burnham scrapped VAT on household electricity bills in October to provide relief for households.
02Why it matters
Rising inflation means everyday costs for fuel and energy are increasing, which could lead to higher mortgage payments and reduced household spending power.
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