UK inflation rise to highest in almost a year as Iran war drives fuel prices higher
UK inflation rose to 3.5% in September, driven primarily by surging fuel costs linked to the ongoing war in Iran and supply chain bottlenecks. Economists now anticipate the Bank of England will raise interest rates to 4% at their November meeting to combat rising prices.
Why it matters
Rising inflation and potential interest rate hikes directly impact the cost of living and economic stability for UK households and businesses.
LONDON -- Inflation in the U.K. rose to its highest rate in almost a year as the Iran war continues to ratchet up fuel prices, official figures showed Wednesday, cementing market expectations that the Bank of England will raise interest rates next month.
The Office for National Statistics said consumer prices rose by 3.5% in the year to September, up from 3.1% in August. That's the highest reading since October last year, and above the 3.4% that most economists had been expecting for the month.
The increase takes inflation further above the Bank of England's target rate of 2%.
Prices across the transport industry were the biggest contributor to higher inflation last month, particularly at the pump. Overall, motor fuels soared by 30% in the year to September, up from a 23% annual rise in August.
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