UK inflation jumps to 3.5% on rising motor fuels cost; UK approves Jackdaw gasfield – business live

AI desk brief

UK inflation accelerated to 3.5% in September, above the 3.4% forecast, as motor-fuel costs surged at the fastest pace in four years and diesel topped £2/litre. Core CPI also firmed to 2.8%, reinforcing expectations that the Bank of England will raise rates next month as markets brace for inflation to move above 4% next year.

The inflation impulse is being driven by the oil shock, with Brent said to be well north of $100/bbl after the US-Israel war on Iran and tighter access through the Strait of Hormuz. The government also approved the Jackdaw North Sea gasfield, a move aimed at energy security but unlikely to offset the broader inflationary pressure in the near term; Bailey and Lagarde speeches later today are the next macro catalysts.