UK consumer price inflation picked up again in September. For savers, the key question is not just the headline figure — it is whether interest on cash savings is keeping pace with rising prices.
Inflation edged higher in September
The Office for National Statistics reported that the Consumer Prices Index rose by 3.5% in the year to September 2026, up from 3.1% in August. A main driver was transport, including motor fuels. Petrol averaged around 169.5p a litre in September, with diesel around 192.5p a litre.
Even a modest rebound in inflation can erode the purchasing power of cash left in low-paying accounts.
Many savings deals still beat 3.5%
Moneyfacts analysis, reported in personal-finance coverage including the Daily Record, found 1,683 savings accounts paying more than the 3.5% inflation rate. That included hundreds of easy-access, notice, Cash ISA and fixed-rate options. The average new savings rate was around 3.78%.
Illustrative figures help show the gap. On £10,000 held for a year, a leading one-year fixed rate of about 5.15% could earn roughly £515 in interest. At 2%, the same balance would earn about £200 — below the roughly £350 price rise implied by 3.5% inflation on that sum. These are market-wide illustrations only, not recommendations for any particular product.
What it means for savers
Inflation of 3.5% is a reminder to check whether your current rate is keeping up with prices. Accounts paying below inflation leave your money losing real value over time, even if the balance looks the same on paper.
That does not mean chasing the highest headline rate at any cost. Notice periods, fixed terms, access needs and tax wrappers such as Cash ISAs all matter. Shop around and compare like-for-like. Base rate decisions from the Bank of England can influence savings pricing over time, but the practical step for most people is reviewing what they earn today against living costs.
Sources: Office for National Statistics, Moneyfacts, Daily Record, Bank of England
Disclaimer: This article is for general information only and is not personal financial advice. Savings rates and inflation change. Consider your own circumstances, and seek regulated advice if you need it.