The September inflation figure, which will determine how much Department for Work and Pensions (DWP) benefits rise in April, is expected to be confirmed on Wednesday morning by the Office for National Statistics (ONS).
Benefit rates are typically increased each April in line with the previous September's inflation level. The September rate is used to decide increases for Universal Credit, Child Benefit and Personal Independence Payment (PIP), among other benefits.
Most forecasters expect the Consumer Prices Index (CPI) inflation rate to have risen to 3.4% in September, up from 3.1% in August, according to a consensus provided by Pantheon Macroeconomics. The final decided rate for benefit increases is then expected to be confirmed at next week's Autumn Budget, when Chancellor John Healey delivers his economic plans in the House of Commons.
State Pension triple lock
An exception to the benefits uprating rule is the State Pension, which increases by whichever is highest out of inflation, wages based on average growth between May and July, or 2.5% – the triple lock promise. State Pensions are widely expected to increase by 3.9% next year, based on wage growth figures already published by the ONS.
Overall inflation has been rising over the summer, fuelled by the Middle East energy shock, which has pushed up the price of fuel and household energy.
Recent benefit increases
This year, benefits increased by 3.8% after the September 2025 figure was confirmed to be 3.8%, according to the consumer price index. The rise took effect from April. Ahead of Mr Healey's first Budget, August's CPI rate came in at 3.1%, which is above the 2% target set by the Bank of England.
Rob Wood and Elliott Jordan-Doak, UK economists for Pantheon, said they expect higher motor fuel prices to have been a major contributor to higher inflation in September. This is largely driven by diesel, with average prices rising to surpass £2 a litre for the first time ever at the beginning of this month, according to RAC figures. The economists also said prices will have risen after a temporary summer VAT cut on family attractions such as theme parks and zoos ended in September.
Cost of living outlook
Sanjay Raja, chief UK economist for Deutsche Bank, said food price rises have been more limited thanks to “fierce” competition between supermarkets to keep prices low for shoppers, but he said this could change from September as the energy shock and extreme weather take effect. He also cautioned that the cost of living is set to rise further, with an increase to Ofgem's price cap on household energy bills kicking in at the start of October, meaning higher prices for dual-fuel households over the winter.
The International Monetary Fund (IMF) recently warned that cost-of-living crises fall harder on poorer households, who dedicate a larger proportion of their income to everyday essentials such as food and energy.
