‘STUPID!’ Labour needs to ‘GROW UP’ as inflation set to SOAR as Iran war and tax hikes bite
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Britons have been dealt a fresh cost-of-living blow as inflation surged to its highest level in almost a year, driven by soaring petrol and diesel prices.
The latest figures will pile further pressure on Chancellor John Healey ahead of his first Autumn Budget, as households face another squeeze on their finances.
The Consumer Prices Index (CPI) rose to 3.5 per cent in September, up from 3.1 per cent in August, according to the Office for National Statistics (ONS).
This marked the highest inflation rate since October 2025, when it stood at 3.6 per cent, and exceeded economists’ expectations of 3.4 per cent.
Rising transport costs were the biggest driver of the increase, with average petrol and diesel prices reaching their highest levels in four years.
ONS chief economist Grant Fitzner said: “Inflation climbed notably in September to its highest annual rate in almost a year.
“Increased fuel prices were again the main driver, with the cost of diesel the highest since July 2022.”
Higher airfares, computer game prices and live event costs also contributed to the increase, although slower price rises for hotel stays helped offset some of the pressure.
Mr Fitzner added that rising crude oil and petrol prices had also pushed up costs for manufacturers, adding to concerns about wider inflationary pressures across the economy.
Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales (ICAEW), warned that inflation was “tightening its grip on the UK economy” as rising fuel prices placed further pressure on households and businesses.
He warned that inflation could climb to 3.8 per cent in October before approaching 4.5 per cent in January, driven by further increases in energy bills.
Mr Thiru said: “Rising inflation is turning the Budget into a perilous high-wire act for the Chancellor,” with higher borrowing costs squeezing the Government’s financial headroom.
He added: “With inflation increasing, the pieces are falling firmly into place for a November rate rise.”
The economist also urged the Chancellor to deliver a “credible, fiscally disciplined Budget” to avoid fuelling further price rises.
Craig Rickman, personal finance expert at interactive investor, warned that the latest inflation figures could put pressure on the Bank of England to raise interest rates in November.
He said: “September’s higher than expected inflation rise to 3.5% continues an unwelcome upward trend, and will put pressure on the Bank of England to hike interest rates when it meets again in November.”
Mr Rickman warned that households could face further financial pressures, with the International Monetary Fund (IMF) forecasting inflation of 3.3 per cent in 2026 and 2.8 per cent in 2027.
He added: “Inflation acts like a quiet tax on your wealth. That’s because if inflation outpaces your returns, your balance may be growing but its spending power falls.”
However, pensioners are set to receive a 3.9 per cent state pension increase next April under the triple lock, with wage growth determining the annual rise for the fourth consecutive year.
Mr Rickman said Chancellor John Healey was expected to confirm the increase at the Autumn Budget, potentially alongside further details of planned changes to the triple lock.
He also urged Britons to strengthen their private retirement savings, warning that the state pension alone was unlikely to provide a comfortable retirement.
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