FX.co ★ UK Inflation Rate Hits 11-Month High

The UK’s annual inflation rate rose to 3.5% in September 2026, its highest level since October 2025, up from 3.1% in August and slightly above market expectations of 3.4%.

Transport made the largest upward contribution, with inflation in this category increasing to 6.6% from 4.6%, driven mainly by higher motor fuel costs. Petrol prices rose by 8.2 pence per litre on the month to 169.5 pence, the highest level since August 2022, while diesel prices climbed 10.7 pence to 192.5 pence, their highest since July 2022. As a result, motor fuel inflation accelerated to 29.8% from 23.0%.

Inflation also picked up in several other categories: housing and household services (to 5.3% from 4.9%), communication (to 5.8% from 5.3%), and recreation and culture (to 2.3% from 1.6%). Food inflation was unchanged at 1.3%, while inflation for restaurants and hotels eased to 3.8% from 4.1%.

Core CPI inflation, which excludes volatile items such as energy and food, increased to 2.8% from 2.6%. Within this measure, goods inflation rose to 3.2% from 2.7%, and services inflation edged up to 3.7% from 3.4%.

On a monthly basis, consumer prices increased by 0.4% in September, following a 0.5% rise in August.