UK inflation hits 3.5% as gov’t debt surpasses £3tn

UK inflation has risen to 3.5%, while government borrowing exceeded expectations in September, adding pressure on  public finances ahead of next week’s Budget.

The latest Consumer Price Index (CPI) figure marks an increase in inflation, driven largely by rising fuel prices and airfares, with higher costs for live events also contributing to the uptick.

The inflation rate came in slightly above analysts’ expectations, presenting an additional challenge for Chancellor John Healey as he prepares to outline the government’s fiscal plans.

The increase in inflation, alongside higher-than-expected borrowing, could limit the government’s ability to provide financial relief to households in the upcoming Budget. Government debt has also surpassed £3 trillion, further highlighting the pressure on public finances.

The latest inflation figure is also expected to serve as a benchmark for calculating benefit increases from next April, potentially affecting payments to eligible households.

The Bank of England targets an inflation rate of 2%, making the latest increase a setback in efforts to keep price rises within its desired range.

Source: BBC