UK inflation has accelerated more than expected to 3.5% as the cost of motor fuels surged at the fastest rate in four years, with diesel topping £2 a litre this month.
The Office for National Statistics said annual inflation, measured by the consumer prices index (CPI), rose from 3.1% in August. Economists had forecast a rise in the consumer prices index to 3.4%.
The ONS said the biggest factor pushing up inflation was transport, in particular motor fuels; while restaurants and hotels made the largest, partially offsetting, downward contribution. The motor fuel inflation rate was the highest since August 2022.
Food prices meanwhile remain steady at 1.3 per cent over the 12 months to September. ONS estimate also suggested a minor drop in food prices in the month between August and September.
Core CPI (excluding volatile energy, food, alcohol, and tobacco costs) rose by 2.8% in the 12 months to September, up from 2.6% in August.
Commenting on the inflation figures, James Walton, Chief Economist at IGD, comments: “Whilst food price inflation has stayed at 1.3%, it is hard to take much comfort as cost pressures continue to build across the food supply chain.
"Retailers are likely offsetting rising costs from geopolitical, regulatory and climate impacts to protect prices for shoppers, particularly ahead of the critical Christmas sales period.
"These cost pressures are placing immense strain on businesses and squeezing margins throughout the supply chain. It is hard to see how this can be maintained longer term, and our data shows that 79% of shoppers expect food prices to rise next year.
"Ultimately, a more resilient food system, with greater domestic capacity, is key to supporting price stability. The industry will be looking to the Budget to see how far the chancellor can support businesses and shoppers against a challenging financial outlook.”