UK Inflation Rate Slows as Expected

The UK’s annual inflation rate rose to 3.5% in September 2026, its highest since October 2025, from 3.1% in August and above expectations of 3.4%. Transport made the largest upward contribution, with inflation rising to 6.6% from 4.6%, driven mainly by motor fuels. Petrol prices rose 8.2 pence per litre month-on-month to 169.5 pence, the highest since August 2022, while diesel prices increased 10.7 pence to 192.5 pence, the highest since July 2022. Motor fuel inflation accelerated to 29.8% from 23.0%. Inflation also rose for housing and household services (5.3% vs 4.9%), communication (5.8% vs 5.3%) and recreation and culture (2.3% vs 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 increased to 2.8% from 2.6%, with goods inflation rising to 3.2% from 2.7% and services inflation to 3.7% from 3.4%. On a monthly basis, consumer prices rose 0.4%, following a 0.5% increase in August.

The UK’s annual inflation rate rose to 3.1% in August 2026, the highest in five months, in line with market expectations and up from 2.9% in July. Transport costs made the largest upward contribution to the annual rate, with inflation rising to 4.6% from 3.6% in July, driven particularly by motor fuels. Petrol prices rose 9.1 pence per litre from a month earlier to 161.3 pence, while diesel prices increased 14.2 pence to 181.8 pence, pushing motor fuel inflation to 23.0% from 15.5%. Inflation also rose for housing and household services (4.9% vs 4.6%), communication (5.3% vs 5.0%), and recreation and culture (1.6% vs 1.4%). Meanwhile, food inflation was unchanged at 1.3%. Core CPI inflation held at 2.6%, with goods inflation rising to 2.7% from 2.2% and services inflation unchanged at 3.4%. On a monthly basis, consumer prices rose 0.5%, the most in four months, matching forecasts and accelerating from 0.3% in July.

The UK’s annual inflation rate rose to 2.9% in July 2026, the highest in four months, from 2.6% in June and in line with market expectations. The largest upward contribution came from housing and household services (4.1% vs 2.7% in June), reflecting the 13% hike in Ofgem’s energy price cap that took effect last month. Gas prices surged 14.7%, the biggest increase since October 2022, while electricity prices rose 3.6%. Prices also rebounded for furniture and household goods (1.0% vs -0.2%) and clothing and footwear (0.5% vs -0.5%), while inflation increased for alcohol and tobacco (2.5% vs 2.1%) and health (3.7% vs 2.5%). Meanwhile, transport inflation slowed (3.6% vs 5.7%) due to lower motor fuel prices, particularly diesel. The average price of diesel fell by 8.8 pence per litre between June and July 2026. Food inflation also eased to 1.3% from 1.7%. On a monthly basis, the CPI increased 0.3%, matching market forecasts and following a 0.1% rise in June.