Inflation jumps to near-year high of 3.5% in pre-Budget blow to Chancellor John Healey

Inflation has jumped to its highest rate in almost a year delivering a pre-Budget blow to Chancellor John Healey and millions of hard-pressed households.

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 on Wednesday.

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 motor fuels.

Average petrol and diesel prices reached their highest level in four years in September, the ONS said.

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.”