UK consumer price inflation accelerated to 3.5% in the 12 months to September, up from 3.1% in August and a touch above the roughly 3.4% consensus, according to the Office for National Statistics. The ONS attributed the rise mostly to transport costs, particularly motor fuel. Core CPIH, which excludes some volatile items and includes housing costs, rose to 3.1% from 2.9%.
The currency reaction was subdued. Published reports put GBP/USD up only about 0.1% around 1.3394 in early European trade, and analysts credited much of the move to a softer dollar instead of the UK data itself. Reports also said the figures reinforce expectations that the Bank of England could raise rates at its next meeting in November, although those expectations come from market commentary and are not a forecast from us.
For traders, the lesson is a familiar one: a number that beats forecasts does not guarantee a strong currency reaction, particularly when the surprise is small and widely anticipated. Fuel-driven inflation can also fade if energy prices fall, which is why policymakers watch core and services measures. Our explainer on how inflation data moves currencies covers why the first move can mislead.
Also on the calendar this week: flash PMIs on Friday, followed next week by the Bank of Canada and the Federal Reserve.
Market commentary for information only; not trading advice. Figures are approximate, from published reports on 21 October 2026.