Story perspectives

UK inflation hits 3.5% as BoE rate seen rising

By Drooid · Oct 21, 2026, 10:13 AM UTC · How we work

Summary

Story summary

UK inflation rose to 3.5% in September, driven by fuel price surges.
Motor fuel inflation hit its highest since August 2022, with petrol up 8.2p to 169.5p/litre and diesel at 192.5p/litre.
Bank of England kept its rate at 3.75% as energy prices stayed high.
Traders see a 98% chance the BoE will raise rates to 4% in November.
Chancellor John Healey pledged measures to ease household pressure from war-driven price rises.

History

Historical Context

The 1973 oil crisis, triggered when OPEC announced a 70% price hike, sent global fuel costs soaring and sparked UK inflation above 9%. Prime Minister Harold Wilson’s government responded with price controls, while the Bank of England raised its base rate to 12% to curb demand. UK petrol at 169.5p per litre mirrors the 1973 spike, when gasoline leapt from 12p to 30p, pressuring the Labour Party’s fiscal agenda. The crisis taught policymakers that abrupt energy shocks can force rapid monetary tightening, a lesson echoed as Governor Andrew Bailey’s BoE contemplates a November rate hike to 4%.

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Story summary

UK inflation rose to 3.5% in September, driven by fuel price surges.
Motor fuel inflation hit its highest since August 2022, with petrol up 8.2p to 169.5p/litre and diesel at 192.5p/litre.
Bank of England kept its rate at 3.75% as energy prices stayed high.
Traders see a 98% chance the BoE will raise rates to 4% in November.
Chancellor John Healey pledged measures to ease household pressure from war-driven price rises.

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