Soaring fuel prices have pushed the UK inflation rate to its highest level this year, according to the latest official figures announced this morning.
Data from the Office for National Statistics (ONS) showed annual inflation rose to 3.5% in September, from 3.1% the previous month, higher than the 3.4% analysts had predicted.
At the same time, government borrowing also hit its highest level so far this year, rising to £24.5billion in September from £17.3billion in August.
The figures set the backdrop for Chancellor John Healey's first Budget, due to be announced next week.
Reacting to the figures, the BBC reports Healey said: "Today we’ve given the green light to getting North Sea gas from the Jackdaw field, investing the revenues in our clean energy future and supporting British workers.
“In my Budget next week, I will keep up this momentum. Maintaining our fiscal discipline and drive for growth in every postcode, while giving businesses and families some breathing space."
Grant Fitzner, Chief Economist at the ONS, said the "notable" inflation increase was driven primarily by diesel prices hitting their highest levels since July 2022.
He said: "Other upward pressures included airfares and, to a lesser extent, computer games and live events, which are often volatile.
"These were partially offset by the cost of hotel stays, where prices rose by less than this time last year.
"The annual cost of both raw materials and goods leaving factories continued to rise, driven by higher crude oil and petrol prices, respectively."