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UK inflation accelerated to 3.5% in September, while public sector borrowing reached £24.5 billion. The figures, reported by the BBC citing the Office for National Statistics (ONS), highlight pressure on both household budgets and the public finances. They come a week before the Budget scheduled for 28 October.
The annual Consumer Prices Index (CPI) inflation rate rose from 3.1% in August to 3.5% in September 2026. According to the BBC, that was its highest level since October 2025. It means prices across a basket of consumer goods and services were, on average, 3.5% higher than a year earlier — not that they rose by that amount in a single month.
Fuel was the main driver of higher inflation
The BBC reports that fuel prices made the biggest contribution to the acceleration. The average price of petrol rose by 8.2p between August and September to 169.5p a litre, while diesel reached 192.5p a litre.
Air fares, computer games and live events also contributed to the higher reading. For households, the central point is that average prices were still rising, and at a faster annual rate than in August. CPI does not, however, mean that every family’s spending increased by exactly the same percentage: the impact depends on what they buy.
Borrowing above forecast as debt passes £3 trillion
The public finance figures also show greater borrowing pressures. According to the ONS figures cited by the BBC, public sector borrowing totalled £24.5 billion in September, £1.8 billion more than in the same month a year earlier.
Cumulative borrowing in the current financial year to September was £6 billion above the forecast from the Office for Budget Responsibility (OBR), the independent body that assesses the outlook for the UK’s public finances. That figure is the gap against the forecast over the period, not the amount borrowed in September alone.
The BBC also reports that total public debt exceeded £3 trillion for the first time, although it fell relative to the size of the economy. Those findings are not contradictory: the cash value of debt and its share of the economy are different measures. Likewise, the total debt should not be confused with borrowing in an individual month.
Budget scheduled for 28 October
The inflation and public finance readings create a difficult backdrop for the Budget, due to be presented on 28 October 2026. According to the BBC, Chancellor John Healey, who is preparing the statement, has pledged to retain the fiscal rules and the commitment not to raise income tax, National Insurance contributions or VAT.
These are commitments about future decisions, not newly enacted legislation. The Budget itself will set out what the government proposes as it faces higher-than-forecast borrowing and a renewed acceleration in price rises.
