Increase in annual price growth in September comes amid fears rate will breach 4% next year
UK inflation climbed by more than expected in September to 3.5% after a surge in prices from the conflict in the Middle East that pushed the cost of diesel above £2 a litre.
In a blow to John Healey before his first budget as chancellor in a week’s time, the Office for National Statistics said annual inflation rose from 3.1% in August. Economists had forecast an increase in the consumer prices index to 3.4%.
Oil and gas prices have soared since the end of February when the US and Israel launched their war on Iran. The practical closure of the strait of Hormuz to most fossil fuel traffic since then has sent the price of Brent crude well north of $100 a barrel.
Petrol prices have leapt above £1.70, while the cost of a litre of diesel has continued to rise, hitting a record high of more than £2 a litre this month.
Bank of England officials are widely forecast to raise interest rates when they meet next month amid concerns that inflation will jump above 4% next year – more than double their 2% target rate – as the price of a wider range of goods increases in response to higher oil and gas prices, including commercial transport and domestic heating.
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