The latest figures also present a challenge for Chancellor John Healey, who is preparing to deliver his first Budget on 28 October. Higher energy costs, increased government borrowing and concerns about further price rises have narrowed the Treasury’s room for manoeuvre.<\/p>\n\n\n\n
According to the Office for National Statistics (ONS<\/strong>), annual Consumer Prices Index (CPI<\/strong>) inflation increased from 3.1% in August to 3.5% in September, exceeding economists’ forecasts of 3.4%. It was the highest reading since October 2025, when inflation reached 3.6%.<\/p>\n\n\n\n Transport costs were the largest contributor to the increase, particularly petrol and diesel. Motor fuel prices rose by 29.8% over the year to September, compared with an annual increase of approximately 23% in August. Average petrol prices climbed by 8.2p per litre between August and September, reaching 169.5p. Diesel increased by 10.7p to 192.5p per litre, its highest level since July 2022.<\/p>\n\n\n\n The increases followed disruptions to global oil and gas supplies linked to the conflict involving Iran. US and Israeli attacks beginning in February were followed by severe restrictions on shipping through the Strait of Hormuz<\/strong>, a major route for international oil supplies.<\/p>\n\n\n\n Other categories also contributed to inflation. Airfares fell by less than usual following the summer travel period, while computer games and live events added upward pressure. Hotel prices provided a partial offset.<\/p>\n\n\n\n