UK Inflation Jumps to 3.5% in September on Soaring Fuel Costs

05:33 AM EDT, 10/21/2026 (MT Newswires) -- Britain's annual inflation accelerated more than expected in September to reach its highest level in nearly a year as petrol and diesel costs surged, according to data from the Office for National Statistics published Wednesday. Consumer price growth came in at 3.5% year over year for the month, up from August's 3.1% and analysts' expectations of 3.4%. The reading also marks the highest since October 2025. "Increased fuel prices were again the main driver, with the cost of diesel the highest since July 2022," ONS Chief Economist Grant Fitzner said. Fitzner added that higher airfares, computer games and live events also added upward pressure, though slower growth in hotel rates provided a partial offset. Annual growth in transport prices climbed to 6.6% in September from 4.6% a month ago. The increase was driven by motor fuel prices, which surged 29.8% on an annual basis versus the prior month's 23% rise. Excluding energy, food, alcohol and tobacco, the annual inflation rate stood at 2.8%, consistent with the consensus estimate and above 2.6% earlier. Even with rising inflation, ING noted that second-round inflationary pressures have yet to materialize. "Inflation is on course to hit 4% this winter. But there's still very little sign that the rise in energy prices is spilling into other parts of the inflation basket. The Bank of England is set to hike rates in November and probably February too. But assuming second-round effects stay contained, we think officials will return to rate cuts by the end of 2027," ING said in a quick take report.