Quilter says UK inflation rise strengthens case for higher interest rates
TLT•Quilter Cheviot’s Richard Carter said rising UK inflation strengthens the case for higher interest rates. September inflation rose to 3.5% from 3.1% in August, while public borrowing reached £24.5 billion and public debt exceeded £3 trillion for the first time.
1. Inflation and borrowing rise
Quilter Cheviot’s Richard Carter warned on October 21, 2026, that rising UK inflation strengthens the case for higher interest rates. Inflation reached 3.5% in September, up from 3.1% in August, driven largely by transport costs, particularly motor fuels. Public sector borrowing was £24.5 billion in September, £1.9 billion above forecasts; borrowing totaled £97.8 billion in the first six months of the financial year, £6 billion above the Office for Budget Responsibility’s forecast.
2. Debt interest weighs
Public debt surpassed £3 trillion for the first time. September debt interest was £10.9 billion, constraining the government’s spending ambitions.
