UK inflation jumps to highest rate in almost a year after fuel prices climb

UK inflation has risen to its highest rate in almost a year as surging petrol and diesel prices pushed up the cost of living, new figures show.

The rate of Consumer Prices Index (CPI) inflation was 3.5% in September, up from 3.1% in August, the Office for National Statistics (ONS) said.

This was the highest CPI rate since the 3.6% recorded in October last year, and came in above the 3.4% that most economists had been expecting for the month.

Prices across the transport industry were the biggest contributor to higher inflation last month, particularly at the pump.

Overall, motor fuels soared by 30% in the year to September, up from a 23% annual rise in August, ONS data showed.

Between August and September, average petrol prices rose by 8.2p to 169.5p per litre, which was the highest price recorded in around four years.

Diesel also surged by 10.7p to 192.5p, the highest price since July 2022.

According to RAC figures, average diesel prices surpassed 200p a litre for the first time ever at the beginning of this month.

Fuel costs have been soaring because of the Iran war which has squeezed global oil and gas supplies.

Chancellor John Healey said price rises from global conflicts were ‘hitting Britain’ (Peter Byrne/PA)

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ONS chief economist Grant Fitzner said: “Inflation climbed notably in September to its highest annual rate in almost a year.

“Increased fuel prices were again the main driver, with the cost of diesel the highest since July 2022.

“Other upward pressures included airfares and, to a lesser extent, computer games and live events, which are often volatile.

“These were partially offset by the cost of hotel stays, where prices rose by less than this time last year.

“The annual cost of both raw materials and goods leaving factories continued to rise, driven by higher crude oil and petrol prices, respectively.”

Responding to the new figures, Chancellor John Healey said: “We know that price rises from conflicts in the Middle East and Europe are hitting Britain and countries worldwide.”

But he said the Government’s decision on Wednesday to begin drilling in the Jackdaw gas field in the North Sea was investment “in our clean energy future and supporting British workers”.

“In my Budget next week, I will keep up this momentum,” he said.

“Maintaining our fiscal discipline and drive for growth in every postcode, while giving businesses and families some breathing space.”