Soaring fuel prices drive up inflation

Inflation went up in September for the third consecutive month - in part because of the ongoing Middle East crisis.

Figures from the Office for National Statistics (ONS) show that inflation rose from 3.1% to 3.5% in the year to September 2026.

The increased had been widely expected - and one big cause of the increase is no surprise.

Motorists paying more at the pumps

Drivers have been watching with alarm in the last few months as forecourt prices tick up day after day.

According to the AA, a litre of petrol cost an average of 174.27p at the end of last week.

That’s 42.56p a litre - or 32.2% - higher than it was a week before the US-Israel war with Iran started.

A litre of diesel, meanwhile, cost 199.27p a litre on average - an increase of 57.81p, or 40.9%.

But rising fuel prices don’t just make filling up your car more expensive.

They increase the cost of delivering and transporting goods, and some businesses can only absorb these higher prices by passing them on to their customers.

What is inflation?

Inflation is a measure of how fast prices are rising.

So if the figure goes up, your money doesn’t stretch as far as it did before.

And if inflation goes down, prices are still rising but at a slightly slower rate, so there's a bit less pressure on your finances.

The ONS measures inflation by tracking the prices of items in an imaginary shopping basket, such as bread, milk, cars and televisions, every month, and working out how much the total price has changed.

Inflation also has a knock-on effect on interest rates.

The Bank of England can put up interest rates to keep inflation under control and close to its target of 2%.

So that influences the cost of borrowing money, the returns you can get on your savings, and whether it’s a good idea to spend or borrow at any given time.

What can I do if I’m struggling with the cost of living?

If you’re feeling the pressure as prices head upwards, there are some practical steps you can take.

Get on top of your household budget

Firstly, look closely at your income and outgoings, so you know exactly what you’re earning and where everything is going.

You can then prioritise essential expenses and work out where money can be saved, perhaps by cancelling unused subscriptions.

We’ve put together a guide to how to create a budget to help you get started. 

Look at what benefits you could claim

You might be entitled to some financial support to help you cover day-to-day expenses, even if you’re in work.

Give us a ring and we can check for you, or use our free benefits calculator to see what support you could get.

It might be more than you realise.

Ask for debt advice

If you’re dealing with debts that you’re struggling to pay off, contact us for confidential, practical and impartial debt advice.

Check our money saving ideas

Keep checking back here for our regular tips on how to cut costs at home, such as:

• Where can I get cheaper fuel for the car?
• 50 ways to cut your fuel costs
• Save money by saving energy this winter
• Set reminders so you know when contracts are up
• How to make your money go further

You’ll also get round-ups of standout deals and low-cost recipes that can help you save money.