Rising energy prices from the ongoing Middle East conflict have driven UK CPI inflation to 3.5% in September 2026, up from 3.1% in August, with motor fuels and household energy contributing the largest share. The Bank of England’s November 2026 Monetary Policy Report projects CPI averaging near 3.8% for 2026 Q4 before peaking higher in 2027, supporting the 54.5% market-implied probability for a 3.5–3.9% annual outcome. The MPC’s 8–1 vote to raise Bank Rate to 4% underscores efforts to contain second-round effects amid restrictive policy. Traders are monitoring the November 18 CPI release and December policy meeting for signs of sustained momentum or moderation in the energy-driven path.