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

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1. 1

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

   BBC NewsPublished Oct 21, 2026Checked Oct 21, 2026

   “The pace of UK price rises accelerated ahead of Chancellor John Healey's first Budget, pushed up by sharp increases in petrol and diesel prices. The rate of inflation rose to 3.5% from 3.1% in the year to September, its quickest pace since October 2025, according to the Office for National Statistics (ONS). The cost of filling up a vehicle has soared in recent months as conflicts in the Middle East and Europe continue to squeeze global oil supplies. The inflation figures came as UK government borrowing jumped to nearly £25bn in September, adding to pressure on Healey as he gears up for the Budget. Petrol prices in September were the highest since August 2022, the ONS said, while diesel also rocketed. The average price of petrol rose by 8.2p per litre to 169.5p per litre between August and September, while diesel rose to 192.5p per litre. Motor fuel prices overall rose by 29.8% in the period covered by the figures. ONS chief economist Grant Fitzner said September's "notable" increase meant inflation was at its highest rate in almost a year. The wars in the middle east and Ukraine have pushed up fuel prices. The effective closure of the Strait of Hormuz by Iran after US and Israeli attacks has severely disrupted a major global supply line for crude oil, while oil refining capacity has been hampered globally by Russian and Ukrainian attacks on each other's infrastructure.”

2. 2

   Inflation effects of oil and gas prices in the UK: Symmetries and asymmetries

   Utilities Policy (Abubakar et al.)Published Jul 27, 2024Checked Oct 21, 2026

   “The United Kingdom is among the countries experiencing a cost-of-living crisis believed to be influenced, at least in part, by the dynamics of the international oil and gas markets. To this end, this study aims to achieve to achieve two objectives. Firstly, the dynamic association between the UK's inflation and oil and gas prices is examined. Further, the study examines whether the response of the UK's inflation to energy price dynamics is (a)symmetric. This study adopts wavelet coherency to determine the dynamic co-movement between energy prices and inflation. In addition, the dynamic simulated autoregressive distributed lag model (DS-ARDL) is used to examine the dynamic response of inflation to energy price changes. The estimation results reveal a symmetric response of inflation to gas price shocks. Further, the response of inflation to oil price shocks is asymmetric. Interestingly, the effect of gas price dynamics passes more strongly to inflation than to oil price dynamics. These findings suggest that a more diversified energy mix could help prevent substantial energy price pass-through to inflationary pressures.”

3. 3

   The impact of the cost-of-living crisis on population health in the UK: rapid evidence review.

   BMC public health (Meadows et al.)Published Feb 22, 2024Checked Oct 21, 2026

   “Changes in behaviour are likely particularly around changes in food buying patterns and the ability to heat a home. System partners are also impacted, with voluntary sectors seeing fewer volunteers, an increase in petty crime and theft, alternative heating appliances causing fires, and an increase in burns and burn-related admissions. To mitigate against these impacts, support should be provided, to the most vulnerable, to help increase disposable income, reduce energy bills, and encourage home improvements linked with energy efficiency. Stronger links to bridge voluntary, community, charity and faith groups are needed to help provide additional aid and support.ConclusionAlthough the CoL crisis affects the entire population, the impacts are exacerbated in those that are most vulnerable, particularly young children, single parents, multigenerational families. More can be done at a community and societal level to support the most vulnerable, and those living with long-term multimorbidity. This review consolidates the current evidence on the impacts of the cost of living crisis and may enable decision makers to target limited resources more effectively.”

4. 4

   The role of inflation in the UK economy in the post-pandemic era

   Contemporary Europe (Podkolzina)Published Apr 15, 2023Checked Oct 21, 2026

   “Based on the analysis of the economic literature, speeches given by the central bank’s staff, official documents and statistical data the author discusses the implicit transition in the regulation approaches used by HM Treasury and the Bank of England. There is some evidence that the cost-of-living crisis as a part of the inflation problem gets a top priority in the post-pandemic era. The government addresses this issue mainly through the income redistribution and benefits and financial support for lower income households. With regard to the inflation problem per se, the official approach implies the shift from monetary to fiscal tools. It means the expanding use of automatic stabilizers through increasing taxes and NICs in accordance with the IMF recommendations. Meanwhile, the Bank of England’s measures are more consistent with the task of financing the government’s borrowing than maintaining the price stability. These findings highlight the rising role of the state in the UK economy. The paper concludes with some comments regarding the split within the conservative party over the marked shifts in the monetary and fiscal policy.”

5. 5

   Energy expenditures and CPI inflation in 2022: Inflation was even higher than we thought

   Energy Economics (Chowdhury & Dixon)Published Apr 9, 2025Checked Oct 21, 2026

   “Following the sudden increase in the energy price in the second quarter of 2022 caused by the Russia-Ukraine war, inelastic demand generated significant changes in household expenditure shares for energy (particularly in electricity, gas, and other fuels and in fuels and lubricants). These produced a significant downward bias in the official CPI inflation rate for energy and in the official CPI inflation rate for all items in the UK. The downward bias was significantly higher in the European Union in 2022, specifically in Belgium, Estonia, Ireland, Greece, Italy, Cyprus, Lithuania, the Netherlands, Romania, and Slovenia.”