Households face a likely November interest rate hike after soaring fuel prices drive inflation to an 11-month high
John Healey, who has promised families 'breathing space' at the Budget on 28 October, blamed Middle East and European conflicts for petrol hitting 169.5p a litre.Diesel has not reached 192.5p a litre since July 2022, ONS chief economist Grant Fitzner noted, as September's inflation rate — used to set benefit rises — came in at 3.5%.
Motor fuel prices rocketed almost 30 per cent in the year to September, dragging CPI inflation up from 3.1 to 3.5 per cent. Diesel hit 192.5p a litre and petrol 169.5p, both their highest in over four years, after the US-Israeli war with Iran squeezed oil supplies. The figures land a week before Labour's 28 October budget, in a blow to Healey. Economists warn inflation could top four per cent this winter.
CBI economist Martin Sartorius says a rate rise is 'firmly on the table'.
The Bank of England's 5 November hike would be its first since 2023.
AJ Bell's Danni Hewson: 'funding our lives is only going to get harder'.
