UK inflation rises to 3.5% as fuel prices surge amid Middle East war

Summarised from 8 outlets · 17 reports · Updated 21 Oct, 07:50 · Archive

UK inflation rose to 3.5% in September, driven by surging petrol and diesel prices linked to the Iran war.

The Office for National Statistics said UK inflation climbed to 3.5% in the year to September, up from 3.1% in August. The figure exceeded forecasts of 3.4% from most economists.

Motor fuel prices were the largest driver of the acceleration. Petrol and diesel costs reached their highest levels in approximately four years, with average petrol prices rising 8.2p to 169.5p per litre between August and September. Diesel rose 10.7p to 192.5p per litre, with RAC figures showing average diesel prices surpassing 200p per litre for the first time at the beginning of October. Overall, motor fuel prices rose 29.8% in the year to September, up from 23% in August.

The surge in fuel costs reflects the impact of conflicts in the Middle East and the closure of the Strait of Hormuz, which has squeezed global oil and gas supplies. Brent crude oil prices have jumped to between $95 and nearly $100 per barrel, well above the $70 level before the US and Israel launched strikes in Iran in late February.

Other upward pressures on inflation included airfares and, to a lesser extent, computer games and live events. These increases were partially offset by lower hotel prices than a year earlier. Services inflation edged up to 3.7%, while core inflation, which excludes volatile items such as energy, rose to 2.8% from 2.6% in August.

ONS chief economist Grant Fitzner said: 'Inflation climbed notably in September to its highest annual rate in almost a year. Increased fuel prices were again the main driver, with the cost of diesel the highest since July 2022.'

The inflation rise comes as a blow to Chancellor John Healey ahead of his first Budget, scheduled for the following week. The Bank of England is widely expected to raise interest rates when it meets next month, amid concerns that inflation could breach 4% next year. The government borrowed £25bn in September, £1.8bn higher than a year earlier, as higher inflation pushed up debt interest costs.

How it is being reported

• UK inflation jumps to highest rate in almost a year after fuel prices climbThe rate of Consumer Prices Index inflation was 3.5% in September, up from 3.1% in August, the ONS said.Evening Standard · 21 Oct, 07:36
• UK inflation jumps to highest rate in almost a year after fuel prices climbThe rate of Consumer Prices Index inflation was 3.5% in September, up from 3.1% in August, the ONS said.Independent Business · 21 Oct, 07:36
• Inflation jumps to near-year high of 3.5% in pre-Budget blow to Chancellor John HealeyThe rate of Consumer Prices Index (CPI) inflation was 3.5% in September, up from 3.1% in AugustEvening Standard · 21 Oct, 07:27
• UK inflation rises to its highest rate in almost a year after fuel surgeThe rate of Consumer Price Index (CPI) inflation was 3.5 per cent in SeptemberThe Independent · 21 Oct, 07:22
• Surging fuel prices push UK inflation rate to 3.5% ahead of BudgetInflation accelerated to 3.5% from 3.1% in the year to September, according to the Office for National Statistics (ONS).BBC Business · 21 Oct, 07:21
• UK inflation jumps to 3.5% — cementing rate hike expectationsCNBC · 21 Oct, 07:20
• UK inflation jumps to highest rate in almost a year after fuel prices climbThe rate of Consumer Prices Index inflation was 3.5% in September, up from 3.1% in August, the ONS said.Independent Business · 21 Oct, 07:15
• UK inflation jumps to highest rate in almost a year after fuel prices climbThe rate of Consumer Prices Index inflation was 3.5% in September, up from 3.1% in August, the ONS said.Evening Standard · 21 Oct, 07:15
• UK inflation jumps to 3.5% on rising motor fuels cost; UK approves Jackdaw gasfield – business livePetrol and diesel costs rise the most in four years Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. UK inflation has accelerated more than expected to 3.5% as the cost of motor fuels surged at the fastest rate in four years, with diesel topping £2 a litre this month. Continue reading...Guardian Business · 21 Oct, 07:14
• Inflation leaps above expectations to 3.5 per centInflation jumped to 3.5 per cent in the 12 months to September as the UK economy looks set to suffer the damaging effects of energy price increases caused by the Iran war over the coming months. The consumer price index (CPI) reading rose above market expectations. This was also above last month’s figure of 3.1 [...]City AM · 21 Oct, 07:08
• Inflation hits 3.5% as rising cost of fuel sends prices soaring to highest level for a year - sparking fresh headache for Andy Burnham ahead of next week's BudgetThe rate of Consumer Prices Index inflation rose to 3.5 per cent in September from 3.1 per cent in August, the Office for National Statistics said today.Daily Mail · 21 Oct, 07:06
• UK inflation rises by more than expected to 3.5% as war drives up fuel pricesIncrease in annual price growth in September comes amid fears rate will breach 4% next year UK inflation climbed by more than expected in September to 3.5% after a surge in prices from the conflict in the Middle East that pushed the cost of diesel above £2 a litre. In a blow to John Healey before his first budget as chancellor in a week’s time, the Office for National Statistics said annual inflation rose from 3.1% in August . Economists had forecast an increase in the consumer prices index to 3.4%. Continue reading...Guardian Business · 21 Oct, 07:02
• UK inflation expected to have accelerated in September after fuel surgeThe September inflation rate will be watched closely by economists as it is typically used to decide the level that many benefits will increase.Evening Standard · 21 Oct, 02:45
• UK inflation expected to have accelerated in September after fuel surgeThe September inflation rate will be watched closely by economists as it is typically used to decide the level that many benefits will increase.Independent Business · 21 Oct, 02:45
• UK inflation expected to have accelerated in September after fuel surgeThe September inflation rate will be watched closely by economists as it is typically used to decide the level that many benefits will increase.Evening Standard · 20 Oct, 16:13
• UK inflation expected to have accelerated in September after fuel surgeThe September inflation rate will be watched closely by economists as it is typically used to decide the level that many benefits will increase.Independent Business · 20 Oct, 16:13
• Inflation 'rose to 3.4% in September' after surge in petrol and diesel pump pricesFigures from the Office for National Statistics are expected to show fuel prices pushed inflation to around 3.4% in SeptemberThe Mirror · 19 Oct, 11:40

In this story: Office for National Statistics · Bank of England · John Healey · RAC · Iran · Middle East · UK

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