UK inflation has risen to 3.5% in the 12 months to September, the Office for National Statistics (ONS) reveals.

The latest figure is an increase on August when inflation stood at 3.1%.

Last month, the Bank of England decided to hold base rate at 3.75%, with the hope of keeping inflation under control.

The Monetary Policy Committee’s next meeting is on 5 November, the week following the Autumn Budget.

The latest data marks two years since inflation was below the BoE’s 2% target.

Commenting on today’s inflation data, Sprive chief executive Jinesh Vohra says the increase “puts further pressure on the Bank of England to keep interest rates higher for longer, with a rate rise now very likely”.

“Mortgages are already at a three year high, and a rate rise could mean mortgage rates remain higher for longer, putting even more pressure on household budgets.”

SPF Private Clients chief executive Mark Harris suggests the chance of an interest rate rise before the end of the year looks “increasingly likely” given the rise in inflation.

Harris adds: “Swap rates, which underpin the pricing of fixed-rate mortgages, have been volatile in recent weeks, resulting in mixed pricing movements by lenders with some trimming rates while others increase pricing. The average shelf-life of products has also contracted as lenders try to deal with changing funding costs.”

Mortgage Advice Bureau strategic relationship director Rachel Geddes says: “After two rises in a row, a third was always a real possibility, so today’s figure of 3.5% doesn’t tell us anything we didn’t expect.”

“There is some good news, though. In the three months to July, regular wages were 3.5% higher than a year earlier, according to the Office for National Statistics. Once rising prices are taken into account, that’s an increase of 0.6%, so pay is only just ahead of prices.”