UK inflation rises to 3.5% as September borrowing exceeds forecast

UK consumer price inflation rose to 3.5% in the year to September, up from 3.1% in August and its highest rate since October 2025. Public sector borrowing for September was £24.5bn, £1.8bn more than a year earlier and £1.9bn above the official forecast for the month, according to figures released on Wednesday by the Office for National Statistics. [1] [2]

Transport, particularly motor fuel, made the largest upward contribution to the rise in the annual inflation rate. The average price of petrol increased by 8.2p a litre between August and September to 169.5p; diesel rose by 10.7p to 192.5p a litre. Motor fuel prices were 29.8% higher than a year earlier. [1]

The borrowing picture is more mixed than September’s figure alone suggests. In the first six months of the financial year, the public sector borrowed £97.8bn — £4.4bn less than in the same period last year, but £6bn more than the Office for Budget Responsibility had forecast. Central government debt interest payable in September was £10.9bn, up £1.6bn on a year earlier. [2]

Public sector net debt was provisionally estimated at just over £3tn at the end of September. Although that was a nominal high, debt as a share of the economy stood at 94.0%, down 0.7 percentage points from a year earlier. Chancellor John Healey is due to present the Budget on 28 October, alongside updated fiscal forecasts. [2] [3]