Economists at Pantheon Macroeconomics predicted that higher motor fuel and airfare prices would help drive inflation to 4% in September. (PA Graphics)September’s predicted jump in inflation could represent a peak in the rising cost of living for UK households. However, the increase is based on either this inflation rate, average earnings growth between May and July, or 2.5%. Given earnings growth was confirmed as 4.8%, the inflation rate will only be used if there is a shock acceleration beyond this level. However, higher inflation would also contribute to a higher tax take, with the September rate also typically used to calculate some annual tax increases such as for business rates.

Source: The Times October 22, 2025 05:58 UTC