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flag UK inflation hits 4% in September, highest in 21 months, due to new 20% VAT on key goods and services.

flag UK inflation is projected to rise to 4% in September, the highest in 21 months and since January 2024, driven by higher food, fuel, air fares, clothing, and private school fees due to a new 20% VAT rate. flag Economists debate whether this marks a peak, with forecasts ranging from a slight drop to 3.8% by year-end or a peak at 3.9%. flag The data will influence benefit and pension adjustments under the Triple Lock, tax policy, and fiscal planning ahead of the autumn Budget, while also affecting the Bank of England’s approach to interest rate cuts.

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