UK inflation rose to 3.5% in September 2026, up from 3.1% in August, as higher motor fuel prices helped push the annual rate upwards, according to official figures released on Wednesday 21 October.
The Office for National Statistics (ONS) reported that the Consumer Prices Index (CPI) increased by 0.4% during September. The 3.5% headline figure measures the change in prices over 12 months, not a single-month rise.
Petrol and diesel drive inflation higher
Transport, particularly motor fuels, made the largest upward contribution to the change in the annual inflation rate. The ONS said average petrol prices increased by 8.2 pence per litre between August and September to 169.5p, while diesel increased by 10.7p per litre to 192.5p.
Overall motor fuel prices were 29.8% higher than a year earlier. Transport prices rose 6.6% annually in September, compared with 4.6% in August. Restaurants and hotels made the largest partially offsetting downward contribution to the change in annual inflation.
Underlying price pressures persist
Core CPI inflation, which excludes energy, food, alcohol and tobacco, rose to 2.8% from 2.6%. Services inflation increased to 3.7% from 3.4%, while goods inflation rose to 3.2% from 2.7%.
The broader CPIH measure, which includes owner-occupiers' housing costs, increased to 3.6% from 3.3% in August. Food and non-alcoholic beverage inflation remained at 1.3%.
Household budgets and the Budget
Rising fuel prices add pressure on motorists and businesses that rely on transport. The latest figures also come ahead of the government's Budget on 28 October and will be considered alongside other economic evidence when policymakers assess the outlook for prices and interest rates.
The Bank of England's inflation target is 2% CPI. The latest ONS figures do not themselves constitute an announcement of any interest-rate change.
Important context
A higher annual inflation rate means prices are rising faster than before, not that the overall price level has fallen. Motor fuels were the main contributor to the change in annual inflation between August and September; they are not necessarily the largest contributor to the overall cost of living.