UK inflation rises by more than expected to 3.5% as war drives up fuel prices
Summary
UK inflation rose to 3.5% in September, higher than expected, mainly because of rising fuel costs linked to the war in the Middle East. This increase affects benefits, taxes, and the Bank of England's plan to raise interest rates soon.Key Facts
- UK inflation went up from 3.1% in August to 3.5% in September 2026.
- The rise was driven mostly by higher petrol and diesel prices, with diesel increasing by 10.7p per litre.
- Oil and gas prices surged after conflict started in the Middle East in February, disrupting supply routes.
- Air fare prices fell less than usual due to higher fuel costs.
- Clothing prices dropped slightly, and food price growth stayed steady at 1.3%.
- Higher inflation means increases in benefits like child benefit and business taxes tied to inflation.
- The Bank of England is likely to raise interest rates from 3.7% to control inflation.
- UK government borrowing costs are rising, with the budget deficit at £24.5 billion in September and total debt reaching £3 trillion.
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