Surging fuel prices push UK inflation rate to 3.5% ahead of Budget

Inflation rates in the UK surged ahead of Chancellor John Healey's first Budget, reaching 3.5% in September, up from 3.1% in the previous year. The rapid price increases were driven by soaring petrol and diesel prices, which rose by 29.8% between August and September. The ONS attributed the inflation spike to geopolitical conflicts in the Middle East and Ukraine, which have disrupted global oil supplies and led to higher fuel costs.

Additionally, airfares, computer games, and live events saw price hikes, contributing to the overall inflation surge. As UK government borrowing jumped to nearly £25bn in September, Chancellor Healey faces pressure as he prepares for the Budget on October 28th. Healey acknowledged that rising fuel prices are impacting Britain and other nations, praising the government for its fiscal discipline and announcing plans to increase North Sea gas production from the Jackdaw field.

However, the Conservatives criticized the government's borrowing and inflation, urging Healey to address the deficit and reduce red tape in his Budget. Economists warned that the borrowing figures paint a concerning picture, suggesting a cautious Budget with minimal economic impact, leaving major fiscal decisions for the following year.