UK consumer prices rose 0.4% in September, slowing slightly from August’s 0.5% increase but marking the third-largest monthly gain of 2026, according to the Office for National Statistics.
- Annual inflation accelerated to 3.5% from 3.1% in August, the highest level since October 2025. Inflation has now risen for three consecutive months after falling to a yearly low of 2.6% in June.
What’s driving inflation? Energy prices were the biggest culprit. Gasoline prices jumped 8.2 pence per litre, while diesel surged 10.7 pence. Motor fuel inflation accelerated to 29.8% annually, up from 23% in August.
Other pressures: Transportation inflation climbed to 6.6%, housing and household services reached 5.3%, and communications rose 5.8%.
- Core inflation, which excludes volatile food and energy prices along with alcohol and tobacco, increased to 2.8% from 2.6%.
The bottom line: Inflation remains well above the Bank of England’s 2% target, complicating the outlook for lower interest rates as rising energy costs continue to pressure consumers.