UK Inflation Jumps to 3.5% as Motor Fuel Drives Prices Up

The UK Consumer Prices Index (CPI) rose to 3.5% in the twelve months to September 2026, up from 3.1% in August, reaching its highest level since October 2025, according to data from the Office for National Statistics.

The CPIH including owner occupiers' housing costs registered 3.6%, up from 3.3% in the previous month. On a monthly basis, the index rose by 0.4% in September, following near-stability in the same month last year.

The largest upward contribution to the annual rate came from the transport sector, particularly motor fuels, with fuel prices rising 29.8% over 12 months, compared to 23% in August. Petrol averaged 169.5 pence per litre after an 8.2 pence increase in September, its highest price since August 2022, while diesel reached 192.5 pence following a 10.7 pence increase, its highest since July 2022.

The transport sector increased prices by 6.6% annually, compared to 4.6% in the previous month, while the restaurants and hotels division made an offsetting downward contribution to the change in the annual rate, with price growth there slowing to 3.8% from 4.1%, meaning prices continued to rise but at a slower pace. Core inflation, which excludes energy, food, alcohol, and tobacco, stood at 2.8% compared to 2.6%, while goods prices rose 3.2% and services 3.7%. These figures mean fuel has returned as a main driver of prices after months of relative calm, with core inflation remaining elevated at 2.8%.

What do these terms mean?

Consumer Prices Index: A measure of the change in prices of a typical basket of goods and services purchased by households, used to measure the rate of inflation.

Core Inflation: Inflation that excludes energy, food, alcohol, and tobacco prices because they are volatile, providing a clearer picture of the general price trend.

Motor Fuel: Petrol and diesel used in vehicles, a price item highly sensitive to global oil prices.