Inflation Rises to 3.5%: What September's Figures Mean for UK Founders
UK CPI inflation rose to 3.5% in September 2026, with producer input prices up 8.3% over the year. Here is what the official data shows and how founders can check their exposure.
By Entrepreneur Group · Published
UK consumer price inflation rose more sharply than in recent months in September. The Office for National Statistics (ONS) reports that the Consumer Prices Index (CPI) rose by 3.5% in the 12 months to September 2026, up from 3.1% in August. The broader CPIH measure, which includes owner occupiers' housing costs, rose by 3.6%, up from 3.3%.
For founders, the headline matters less than where the pressure is coming from and how it reaches their own costs, prices and borrowing. This piece sets out what the official data shows, and then offers some practical editorial guidance.
What the September figures show
According to the ONS, transport, particularly motor fuels, made the largest upward contribution to the change in the annual rate. Restaurants and hotels made the largest, partially offsetting, downward contribution.
The increase was not confined to energy. Core CPI, which excludes energy, food, alcohol and tobacco, rose by 2.8% in the 12 months to September, up from 2.6% in August. Goods inflation rose from 2.7% to 3.2%, and services inflation rose from 3.4% to 3.7%.
Business costs further up the supply chain are rising faster still. The ONS producer price release, published on the same day, shows that producer input prices rose by 8.3% in the year to September 2026, up from a revised 6.7% in August. Factory gate (output) prices rose by 4.6%, the largest rise since April 2023. Crude oil made the largest contribution to input price inflation, with prices up 51.0% over the year.
Services producer prices rose by 4.5% in the year to the third quarter of 2026, the largest rise since the second quarter of 2023, with transportation and storage services up 10.7% over the year.
The interest rate backdrop
At its meeting ending 16 September 2026, the Bank of England's Monetary Policy Committee voted 6–3 to keep Bank Rate at 3.75%. The three dissenting members preferred an increase to 4%.
In its September summary, the Committee said that protracted conflict in the Middle East had contributed to further increases in crude and refined energy prices. Based on energy prices at the time, it expected CPI inflation to reach about 3¾% in the fourth quarter of 2026 and to be slightly above 4% in the first quarter of 2027. It judged that the risks to the inflation outlook were tilted to the upside and said it stands ready to act as necessary to return inflation to the 2% target in the medium term.
The next Bank Rate decision is due on 5 November 2026. The September summary is not a forecast of that decision, and businesses should not treat any market commentary as certainty.
What founders can do now
The following is editorial guidance, not financial advice.
- Map your exposure. Identify which of your costs are linked to fuel, energy, transport and imported inputs. The producer price data suggests these are the areas where pressure is currently strongest.
- Review supplier contracts. Check which suppliers can change prices at short notice, which have indexation clauses, and when fixed terms end.
- Revisit your own pricing. If your costs are rising, decide whether and when to pass increases on, how to explain them to customers, and what notice your contracts require.
- Stress-test cash flow. Model how your business would cope if input costs kept rising for several months, and if borrowing costs on any variable-rate facility increased.
- Check your finance terms. A fixed-rate loan may not change immediately; a variable-rate overdraft or loan may move with its reference rate. Read the facility agreement rather than relying on the headline Bank Rate.
The bigger picture
A single month of data does not set a trend, and the ONS, the Bank of England and other forecasters will continue to revise their assessments as new information arrives. The next CPI release is scheduled for 18 November 2026.
What the September data does show is that price pressure is broadening from fuel into wider goods and services, and that it is strongest at the producer stage. Founders who understand where their costs sit in that chain will be better placed to make pricing and cash-flow decisions than those who react only to the headline rate. Businesses considering new borrowing or significant contract changes should take qualified advice for their circumstances.
Sources
- ONS — Consumer price inflation, UK: September 2026 (reviewed 27 October 2026)
- ONS — Producer price inflation, UK: September 2026, including services, July to September 2026 (reviewed 27 October 2026)
- Bank of England — Monetary Policy Summary and minutes, September 2026 (reviewed 27 October 2026)