Fuel prices reaccelerate inflation in Britain
Annual inflation in Britain accelerated to 3.5% in September, driven by rising fuel prices, exceeding analyst expectations. The average price of petrol reached 169.5 pence per liter and diesel 192.5 pence, with an annual increase in fuel prices of about 29.8%. The data comes ahead of the first budget of Finance Minister John Healey.
Annual inflation in Britain accelerated to 3.5% in September, up from 3.1% in the previous month, according to the Office for National Statistics. The reading was higher than the 3.4% forecast by economists polled by Reuters. Transport, especially motor fuel, was the largest upward contributor to the annual rate, while restaurants and hotels partially offset the increase. Motor fuel prices rose annually by about 29.8%, compared with 23% in August. The average price of petrol was 169.5 pence per liter, and diesel 192.5 pence. The data comes ahead of the first budget of Finance Minister John Healey, amid expectations of support for households but within fiscal constraints. The price data coincided with higher-than-expected government borrowing figures, with public debt exceeding £3 trillion. Reuters noted that higher inflation increases payments on index-linked bonds, putting pressure on public finances. The Bank of England had kept its interest rate at 3.75% at its September meeting, with 6 members voting in favor versus 3 who preferred to raise it to 4%.