Brief
UK inflation hits 11‑month high, prompting expectations of November rate hike
September CPI rose to 3.5%, the highest in 11 months, as petrol and diesel prices jumped 30%, fueling expectations of a November Bank of England rate increase.
By Felo News Desk · Published
UK consumer price inflation rose to 3.5% in September, the highest level in 11 months, according to the Office for National Statistics (ONS), prompting economists to say a Bank of England rate hike is "firmly on the table" for its November meeting.
What happened
The ONS reported that the Consumer Prices Index (CPI) increased to 3.5% in September, up from 3.1% in August. Motor fuel prices were a major driver, with petrol and diesel up 30% year‑on‑year. Food and drink inflation held steady at 1.3% for the year, and prices fell 0.2% between August and September.
What the reports add
The Independent noted that the surge in fuel prices is linked to the ongoing US‑Israeli war with Iran, which has squeezed global oil supplies and lifted wholesale costs. It also highlighted that competition among supermarkets may be tempering overall price pressures, according to some experts cited by the ONS.
What was said
Martin Sartorius, lead economist for the Confederation of British Industry, told the outlet that the September inflation rise means an interest‑rate hike is "firmly on the table" at the Bank of England’s November meeting and that the committee will likely aim to "guard against the risk of persistently higher headline inflation becoming embedded in future wage and price‑setting behaviour".
Sanjay Raja, chief UK economist for Deutsche Bank, said further rises in energy prices were "inevitable" and that Middle‑East tensions were delaying any decline in inflation, adding that he expects rates to rise in November and again later in the year.
Danni Hewson, head of financial analysis for AJ Bell, pointed to a "silver lining for households" because food prices remained stable, with food and drink inflation unchanged at 1.3%.
How it came about
The latest figures follow a series of energy‑price shocks that began earlier this year, including the war‑related squeeze on oil supplies. Earlier Felo coverage noted that the Bank of England was expected to keep rates steady in September amid rising energy inflation, but the new data suggest a shift toward tightening in November.
Key facts
- September CPI inflation rose to 3.5%, up from 3.1% in August. (independent.co.uk)
- Petrol and diesel prices increased 30% year‑on‑year to September. (independent.co.uk)
- Food and drink inflation stayed at 1.3% for the year, with a 0.2% monthly decline. (independent.co.uk)
- Martin Sartorius said a rate hike is "firmly on the table" for November. (independent.co.uk)
- Sanjay Raja expects rates to rise in November and again later in the year. (independent.co.uk)
Sources
- [1] independent.co.uk — originally reported as “Interest rate hike ‘firmly on table’ after inflation rises to 11-month high”
