UK Inflation Hits 12-Month High of 3.5% Amid Surging Fuel Costs
UK inflation climbed to 3.5% in September, exceeding forecasts as fuel prices surge. The data pressures the Bank of England ahead of next week's budget.
POLICY WIRE — London, United Kingdom — The United Kingdom’s inflation rate has climbed to its highest level in nearly a year, reaching 3.5% in September. This unexpected acceleration, reported by the Office for National Statistics (ONS), marks a significant increase from the 3.1% recorded in August.
The surge is largely attributed to the rising cost of motor fuels, which have seen their fastest price growth in four years. Notably, diesel prices have surpassed £2 per litre this month, placing additional strain on household budgets.
Underlying price pressures, monitored closely by the Bank of England, also intensified. Services price inflation rose to 3.7% last month, exceeding the 3.6% forecast by economists and climbing from 3.4% in August.
This economic data arrives as a difficult development for Chancellor John Healey ahead of next week’s budget. The figures are expected to heighten calls for government intervention to support struggling households.
Furthermore, the data strengthens the argument for the Bank of England to consider an interest rate hike during its November meeting. The central bank maintains a target inflation rate of 2%.
Reporting by Policy-Wire (PW)
