UK inflation jumps to 3.5% — cementing rate hike expectations

Economists polled by Reuters had been forecasting an annual inflation rate of 3.4%.

September’s print marked a continuation of the U.K.’s upward trend for inflation, which came in at 3.1% in August and 2.9% in July. The September reading was the highest annual inflation figure in a year.

The U.K.’s Office for National Statistics said on Wednesday that the motor fuel inflation rate had hit its highest level since August 2022, when fuel costs surged in the wake of Russia’s full-scale invasion of Ukraine.

Britain is a net importer of energy, making it vulnerable to external energy shocks, such as that caused by the U.S.-Iran war and the subsequent struggle for oil to transit through the Strait of Hormuz.

U.K. motor fuel prices surged 29.8% in the year to September, ONS data showed on Wednesday.

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