U.K. Inflation Climbs to 3.5% as Energy Prices Rise

Rising energy costs pushed U.K. inflation higher in September, adding pressure on the Bank of England as policymakers prepare for a meeting that investors expect could bring the first interest rate increase since the war between the U.S. and Iran began. Consumer prices rose 3.5% from a year earlier, according to the Office for National Statistics.

The September reading accelerated from 3.1% in August and exceeded economists' expectations. A consensus of economists surveyed by The Wall Street Journal had forecast an annual inflation rate of 3.4%.

The latest figures put inflation further above the Bank of England's target, highlighting the challenge facing policymakers as they assess the impact of rising energy prices on consumer costs. The official data, released Wednesday, showed that annual price growth had accelerated by 0.4 percentage points from the previous month.

Investors are anticipating a potential shift in interest rate policy at the Bank of England's upcoming meeting. Market expectations center on a rate increase that would mark the first since the start of the war between the U.S. and Iran.

Policymakers must assess how much of the inflation increase stems directly from higher energy prices, according to the caption accompanying the report. That distinction is relevant to their evaluation of the latest inflation figures as they prepare for the meeting.