Britain’s annual consumer price inflation rose to 3.5% in September, with transport, particularly motor fuels, contributing most to the increase in the annual rate ahead of the Bank of England’s Nov. 5 rate decision.
The Office for National Statistics (ONS) said the rate had been 3.1% in August. Consumer prices increased 0.4% over the month. The September reading also exceeded the 3.4% median estimate in a Reuters poll of economists.
Petrol averaged 169.5 pence per liter in September, up 8.2 pence from August. Diesel averaged 192.5 pence per liter, up 10.7 pence. The petrol and diesel averages were their highest since August 2022 and July 2022, respectively.
Motor fuel prices were 29.8% higher than a year earlier, compared with a 23% annual increase in August.
Core Consumer Prices Index (CPI) inflation, which leaves out food, energy, alcohol and tobacco, rose to 2.8% from 2.6% in August. The annual rate for services increased to 3.7% from 3.4%, while the rate for goods rose to 3.2% from 2.7%.
Inflation remains above the Bank of England’s 2% target. At its September meeting, the Monetary Policy Committee voted 6-3 to leave Bank Rate at 3.75%. The three dissenting members sought an increase to 4%.
The bank said the prolonged Middle East conflict had lifted energy prices. The committee said its rate stance would reflect the shock’s size, how long it lasts and its effects across the economy.
Separate ONS data showed prices paid by producers for inputs rose 8.3% from a year earlier in September. Crude oil was the largest contributor to that annual rate and rose 14% from August.
The September CPI figure also affects increases to some UK benefits, with rules varying by payment.
The ONS is scheduled to publish September retail sales on Oct. 23. The Bank of England’s rate decision follows on Nov. 5, and the October CPI report is due Nov. 18.
