LONDON, Oct. 21 (Xinhua) -- Britain's Consumer Price Index (CPI) rose by 3.5 percent year-on-year in September, marking its fastest increase since November 2025, according to data released by the Office for National Statistics (ONS) on Wednesday.
The latest reading also marks the third successive increase in inflation and is well above the Bank of England's 2 percent target.
Core CPI, which excludes energy, food, alcohol and tobacco, rose by 2.8 percent year-on-year in September, up from 2.6 percent in August.
Transport costs, particularly motor fuels, made the largest upward contribution to the change in the annual CPI inflation rate. ONS data showed that average petrol prices in September reached their highest level since August 2022, while average diesel prices climbed to their highest level since July 2022.
Ahead of next week's Budget, today's data is a stark reminder of the growing price pressures in the UK economy, said Caterina Batog, research and economics analyst at the British Chambers of Commerce (BCC).
Inflation is casting a dark shadow over the businesses who are already struggling with a succession of high costs, she said, noting that BCC's latest survey of over 4,000 firms shows inflation remains the top concern of 60 percent of the respondents.
"With Christmas around the corner, consumers will be understandably concerned by the third increase in inflation in three months," said Harvir Dhillon, lead economist at the British Retail Consortium.
Attributing much of the situation to the sharp rise in petrol and diesel prices, he warned "the lifting of the Ofgem price cap this month will push up October's figure when published in November, having already driven up household energy bills and likely to do so again in January. Rises in the cost of household appliances and pharmaceuticals will further squeeze household budgets."
Citing persistently high inflation, Anna Leach, chief economist at the Institute of Directors, said "next week's Budget will need to tread a careful line."
Targeted support for those most exposed to rising energy costs could help cushion the immediate shock, but how that support is funded matters, she said, adding that further increases in the costs of doing business would undermine the very investment, hiring and economic resilience that the government needs to protect.
On the front of daily consumption, the upcoming Budget provides a crucial opportunity to tackle the high cost of living, Dhillon said. If the government can cut the cost of doing business, retailers will be in a better position to hold back price rises and increase investment in stores and jobs.
"A targeted tax reduction package to ease energy and business rates costs would help unlock the sustained growth we all want to see," Batog echoed.
