EL7.AI
StocksMedium•22 October 2026•
2 min read

UK inflation rises to 3.5% on fuel pressures as activity data awaited

Key Facts

1UK annual inflation reached 3.5% in September 2026, compared with 3.1% in August.
2The FTSE 100 rose 0.1% to 10,752.88 points in the session on 21 October 2026.
3The UK services activity index fell to 52.1 points in September from 52.5 points in August.
4UK retail sales volumes rose 0.5% in August 2026.

Britain's annual consumer price inflation rose to 3.5% in September 2026, according to Office for National Statistics data published on 21 October, with motor fuels making a prominent upward contribution. The reading compared with annual inflation of 3.1% in August, as prices continued to rise at a faster pace than in the previous month. Describing the drivers of the change in annual inflation rates, the ONS said "transport, particularly motor fuels, made the largest upward contribution". On energy costs, the ONS said in its monthly gross domestic product estimate that wholesale electricity and gas prices remained more than twice their levels a year earlier. This annual comparison concerns wholesale energy prices, while motor fuels stood out among the transport components driving the change in consumer price inflation.

On consumption, the ONS estimated that retail sales volumes rose 0.5% month on month in August 2026, according to its retail sales bulletin. However, the agency also reported that "consumer demand indicators weakened in September 2026", describing demand developments in the month following the increase in sales volumes. In services, the business activity index fell to 52.1 points in September from 52.5 points in August, according to an Investing.com report citing S&P Global's index. Companies surveyed by S&P Global in September indicated that some spending and investment decisions had been deferred pending clarity on government policy. Companies linked this wait to the forthcoming budget, with the survey compiler saying "broader spending and investment were sometimes deferred pending clarity on government policy in the forthcoming budget".

In equities, Reuters reported that Britain's FTSE 100 rose 0.1% in the session on Wednesday, 21 October 2026. The index stood at 10,752.88 points, according to the report published by Investing.com on British stocks' performance that session. Wednesday's gain followed two consecutive sessions of declines, according to Reuters, ending the index's losing streak. On the upcoming economic release calendar, the ONS scheduled its next retail sales release for 23 October 2026, following the increase in sales volumes recorded in August. Flash purchasing managers' index readings for October are due the same day, according to the schedule announced by S&P Global, following the decline in British services activity in September.