UK Inflation Rises to 3.5% as Fuel Prices Climb
UK inflation rose to 3.5% in the 12 months to September 2026, up from 3.1% in August, the Office for National Statistics (ONS) said on 21 October. Economists had forecast a rise to 3.4%, so the outturn came in above expectations.
Inflation is measured by the consumer prices index (CPI), which tracks how much the prices of a typical basket of goods and services change over a year. A rate of 3.5% means that, on average, those prices were 3.5% higher than a year earlier.
The main driver was fuel. According to the ONS, a rise in motor fuel prices was the single largest factor pushing inflation up in September. Overall motor fuel prices were 29.8% higher than a year before.
The average price of petrol rose by 8.2p a litre between August and September, while it had fallen by 0.2p in the same month of 2025. Diesel rose by 10.7p a litre over the month, compared with a fall of 0.4p a year earlier, pushing diesel to record levels.
Reuters reported that as of late September, the average price of a litre of diesel stood at 199.18 pence. Filling an average family car cost almost £110, about £31 more than before the impact of the Iran war.
The fuel rise traces back to the conflict in the Middle East. The United States and Israel launched a war on Iran at the end of February 2026, and it disrupted oil and gas flows through the Strait of Hormuz, a key route for energy shipments, driving up energy prices.
Not all categories moved together. Food price inflation held steady at 1.3% in September. The ONS also reported that the related measure CPIH, which adds the cost of owner occupiers' housing, rose to 3.6% from 3.3% the previous month.
The figures land ahead of a policy decision. The Bank of England's current interest rate is 3.7%, and markets widely expected it to rise at the central bank's November 2026 meeting. John Healey, the chancellor of the exchequer (the UK's finance minister), is due to deliver his first budget a week after the September inflation release.
Inflation also affects household payments. Under the 3.5% uprating, the annual increase in benefits, the weekly rate of child benefit for a first child would rise by 95p to £28 from April 2027. Wage growth for the three months to July 2026 was 3.9%, above September's inflation rate, and the state pension is expected to rise by that wage figure under the triple lock, the rule that governs annual state pension increases.
