UK inflation accelerated to 3.5% in September 2026 from 3.1% in August, with motor fuels providing the largest upward push. The Office for National Statistics released the figures on October 21, showing that price pressures also strengthened beyond energy as core and services inflation increased.
Key Takeaways
- Annual CPI inflation rose for a third consecutive month, reaching its highest level since October 2025.
- Motor fuel prices increased 29.8% over the year, the fastest rate since August 2022.
- Core CPI inflation rose to 2.8%, while CPI services inflation increased to 3.7%.
Table of Contents
- UK inflation accelerates for a third month
- Fuel drives the increase, while hotels provide an offset
- Underlying inflation adds to the interest-rate debate
- Conclusion
UK inflation accelerates for a third month
The ONS September 2026 consumer price bulletin showed annual Consumer Prices Index inflation rising from 2.9% in July to 3.1% in August and 3.5% in September. The latest reading exceeded economists’ expectation of 3.4%.
Consumer prices rose 0.4% over September, compared with little change in the same month of 2025. That comparison helps explain the rise in annual inflation: this September’s increase replaced a much weaker monthly movement in the year-earlier calculation.
The broader CPIH measure, which includes owner occupiers’ housing costs, rose 3.6% over the year, up from 3.3% in August. CPI and CPIH measure different baskets, so their annual rates should not be treated as interchangeable.
| Item | Details |
|---|---|
| Average petrol price, September 2026 | 169.5 pence per litre; up 8.2 pence during the month. |
| Average diesel price, September 2026 | 192.5 pence per litre; up 10.7 pence during the month. |
| Food and non-alcoholic beverages | Annual inflation held at 1.3%, unchanged from August. |
| Owner occupiers’ housing costs | Annual inflation increased to 4.0% from 3.9%. |
Fuel drives the increase, while hotels provide an offset
Annual motor fuel inflation accelerated from 23.0% in August to 29.8% in September. Petrol and diesel both became more expensive during the month, contrasting with small price declines a year earlier.
Transport prices overall rose 6.6% over the year, up from 4.6% in August. The annual rate increased even though the transport index fell 0.4% during September, because that decline was much smaller than the 2.3% fall recorded in September 2025.
Restaurants and hotels provided the largest partially offsetting downward contribution to the change in headline inflation. Their annual inflation rate eased to 3.8% from 4.1%, with hotel prices rising less sharply than a year earlier.
Underlying inflation adds to the interest-rate debate
The acceleration was not confined to fuel. Core CPI, which excludes energy, food, alcohol and tobacco, rose 2.8% over the year, compared with 2.6% in August. CPI services inflation increased to 3.7% from 3.4%.
Those measures matter because they distinguish broader price pressures from the direct effect of volatile fuel costs. Their increase shows that September’s stronger headline reading was accompanied by firmer inflation outside energy, although it does not by itself establish that fuel costs caused wider price rises.
Sterling remained broadly stable against the euro and dollar following the release, while UK government bond yields moved little. At that point, market pricing assigned a 98% probability to a 25-basis-point Bank of England rate increase to 4% in November, with further tightening anticipated in December. Those were market expectations, not announced policy decisions.
Conclusion
September’s UK inflation increase combined a sharp fuel-price surge with stronger underlying measures. The next scheduled ONS consumer price release, on November 18, 2026, will provide the next monthly reading on whether those pressures persist.
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