UK inflation accelerates to 3.5% on soaring fuel costs

Inflation in the United Kingdom accelerated to 3.5% in the year to September, exceeding economist forecasts of 3.4% and rising from 3.1% in August. The Office for National Statistics attributed the increase primarily to a surge in motor fuel prices, which rose at the fastest rate in four years, with diesel exceeding two pounds per litre this month.

While transport costs drove the overall inflation rate higher, food prices remained steady at 1.3% over the same period. Core inflation, which excludes volatile categories such as energy, food, alcohol, and tobacco, rose to 2.8% from 2.6% in August.

James Walton, chief economist at IGD, noted that retailers are currently absorbing rising supply chain costs to keep shelf prices stable ahead of the Christmas season. He warned that these pressures are squeezing business margins and that 79% of shoppers expect food prices to increase next year.

Read the full story at Asian Trader.