UK inflation jumps more than expected on rising fuel costs

LONDON

Britain's annual inflation rate accelerated by more than expected in September, rising to 3.5 percent on surging fuel prices, official data showed on Oct. 21.

The Consumer Prices Index jumped from an annual rate of 3.1 percent in August, the Office for National Statistics (ONS) said, one week before the Labour government's release of its annual budget, which is expected to address cost of living pressures.

The September reading was the highest in almost a year, and surpassed analysts' consensus forecast of 3.4 percent.

"Transport, particularly motor fuels, made the largest upward contribution to the... change," the ONS said, as the US-Iran war sent petrol and diesel prices soaring.

The cost of diesel at U.K. pumps recently reached the highest level since July 2022, shortly after Russia launched its invasion of Ukraine.

ONS chief economist Grant Fitzner also noted Wednesday that in September, "the annual cost of both raw materials and goods leaving (U.K.) factories continued to rise, driven by higher crude oil and petrol prices".