CPI September 2026 rose to 3.5% as petrol and diesel costs increased. That left John Healey heading into his first Budget with inflation still feeding through to borrowing costs, even before the fiscal statement is delivered next Wednesday.
Debt interest hit £10.9bn
£10.9bn was paid in debt interest in September, the highest monthly figure since records began. The Office for National Statistics said rising inflation added £4bn to those costs in the month, and the Treasury also ran a higher than expected budget deficit of £24.5bn last month.
£3tn is the level total government debt is estimated to have reached for the first time. Some government bonds are directly linked to the retail prices index, so the recent rise in inflation feeds through into government financing costs rather than staying as a headline figure on its own.
Motor fuels and borrowing costs
4 years is how long it has been since petrol and diesel costs rose by as much as they did this time. The inflation jump to 3.5% came with energy-linked pressure already visible in the debt numbers, and that combination matters because it makes the Budget arithmetic tighter before any new tax or spending choices are set out.
94% of the debt interest paid in September was not a one-off spillover from a single line item; it came on top of inflation moving higher in the same month. If fuel prices keep pushing the index higher, the Treasury faces a second round of strain through the debt stock that is already priced off inflation.
Jackdaw and Neil McCulloch
150 miles east of Aberdeen, the Jackdaw gas field in the North Sea was given consent to begin production. Adura chief executive Neil McCulloch used Radio 4’s Today programme to argue the project fits the energy mix, saying: "Jackdaw is a really good example of a very good gas field."
"Jackdaw itself doesn’t have a flare, and its carbon intensity is eight kilogrammes per barrel of oil equivalent, which is exactly the same as Norwegian pipe gas," he said. He also said: "So, this is exactly equivalent to Norwegian gas in terms of environmental performance, and so we should thank that it’s coming into the grid."
That approval sits beside the inflation story rather than replacing it. Jackdaw was backed as an energy-security measure, but campaigners have argued UK gas fields produce more pollution than Norwegian gas fields, and Lale Akoner said the field is likely to provide around 6% of domestic gas production and around 2% of total demand. For readers, the immediate focus is simpler: the inflation reading has already pushed up borrowing costs, and John Healey now has to write a Budget against that backdrop.
