Fuel surge pushes UK inflation to 3.5%, highest since October

Petrol hit 169.5p a litre in September, its highest price in about four years, while diesel climbed to 192.5p. Those pump prices helped push UK inflation to 3.5%, the fastest yearly rise since October 2025 and above economists’ 3.4% forecast. The figures, released by the Office for National Statistics on Wednesday, show how a global energy shock is affecting everyday costs. ^1,7

Fuel prices rose as the Iran war squeezed global oil and gas supplies. The ONS said motor fuel prices rose 30% in the year to September, up from 23% in August. Petrol rose 8.2p per litre in a month, and diesel rose 10.7p. Airfares, computer games and live events also pushed prices up, while hotel prices rose less than a year earlier. ¹

The effects reach beyond drivers: the Reuters report says services inflation rose to 3.7%, while core inflation, which excludes food and energy, reached 2.8%. Both were above economists’ forecasts, suggesting price rises were not limited to petrol and diesel. Britain’s reliance on imported natural gas leaves it exposed to the energy shock. The figures may add pressure for household help and strengthen the case for higher interest rates. ⁷

Next week’s Budget is the immediate test for Chancellor John Healey, who said the government would seek to give families and businesses breathing space. He also defended Wednesday’s decision to begin drilling at the Jackdaw gas field in the North Sea, saying it would support workers and clean energy. The Bank of England’s November rate decision is another key date: the Reuters report says September’s data adds to the case for a rise. ^1,7