UK inflation rises by more than expected to 3.5% as war drives up fuel prices

UK inflation climbed by more than expected in September to 3.5% after a surge in prices from the conflict in the Middle East that pushed the cost of diesel above £2 a litre. In a blow to John Healey before his first budget as chancellor in a week’s time, the Office for National Statistics said annual inflation rose from 3.1% in August . Economists had forecast an increase in the consumer prices index to 3.4%.

Oil and gas prices have soared since the end of February when the US and Israel launched their war on Iran . The practical closure of the strait of Hormuz to most fossil fuel traffic since then has sent the price of Brent crude well north of $100 a barrel. Petrol prices have leapt above £1.70, while the cost of a litre of diesel has continued to rise, hitting a record high of more than £2 a litre this month.

Bank of England officials are widely forecast to raise interest rates when they meet next month amid concerns that inflation will jump above 4% next year – more than double their 2% target rate – as the price of a wider range of goods increases in response to higher oil and gas prices, including commercial transport and domestic heating. More details soon ...

Source: The Guardian