UK INFLATION REACHES 3.5 PER CENT IN SEPTEMBER

The Office for National Statistics (ONS) said UK consumer price inflation rose to 3.5 per cent in September from 3.1 per cent in August. That was the highest annual rate since October last year, when the ONS recorded 3.6 per cent. Economists had forecast a September rate of 3.4 per cent. The ONS identified transport prices as the largest contributor to the increase. It said motor fuels accounted for much of that pressure.

The ONS said average petrol and diesel prices reached their highest level in four years in September. Diesel rose above £2 a litre this month, while petrol passed £1.70 a litre. Oil and gas prices have climbed since the United States and Israel began their war on Iran at the end of February. The Strait of Hormuz has since been largely closed to fossil fuel traffic, and Brent crude has risen above $100 a barrel. ONS chief economist Grant Fitzner said: “Increased fuel prices were again the main driver, with the cost of diesel the highest since July 2022.”

Fitzner also identified airfares, computer games and live events as upward pressures on inflation. He said hotel prices rose by less than they did at the same time last year, partly offsetting those increases. According to the ONS, the annual cost of raw materials and goods leaving factories continued to rise, driven by higher crude oil and petrol prices respectively. The Bank of England’s inflation target is 2 per cent. Its officials are due to meet next month to decide interest rates.