Surging fuel prices push UK inflation rate to 3.5% ahead of Budget

What happened: UK inflation rose to 3.5% in the year to September from 3.1%, driven by sharp increases in petrol and diesel prices, ahead of Chancellor John Healey's first Budget on 28 October. Key numbers: Inflation 3.5%, up from 3.1%. Petrol up 8.2p per litre to 169.5p; diesel 192.5p per litre. Motor fuel prices up 29.8%. Why it matters: Capital Economics said the borrowing figures "painted a dismal picture" and expects a cautious Budget with little net impact on the economy, leaving the toughest fiscal choices for next year.

UK inflation rose to 3.5% in the year to September from 3.1%, driven by sharp increases in petrol and diesel prices, ahead of Chancellor John Healey's first Budget on 28 October.

Capital Economics said the borrowing figures "painted a dismal picture" and expects a cautious Budget with little net impact on the economy, leaving the toughest fiscal choices for next year.