UK Inflation Rises to 3.5% Annual Rate, Fueling Expectations of Further Interest Rate Hikes
The UK's annual inflation rate climbed to 3.5% in the year through September 2025, exceeding economists' expectations and marking a continued upward trend from previous months’ readings of 3.1% (August) and 2.9% (July). The increase was primarily driven by rising motor fuel prices. This is the highest annual inflation rate recorded over the past year. The latest data strengthens market expectations for further interest rate hikes by the Bank of England, as policymakers seek to bring inflation under control amid persistent price pressures. With inflation now above 3%, central bank officials are likely to remain cautious and may signal tighter monetary policy in upcoming meetings.
Topics: inflation interest rates Monetary Policy Committee (MPC) U.K. economy