Headline inflation in September 2026 arrived at 10.3 percent year-on-year, up sharply from 5.8 percent in September 2025, according to a report released by AHL Research. On a month-on-month basis, CPI rose 1.3 percent in September, lifting average inflation for 1QFY27 to 10.21 percent from 4.30 percent in the same period last year.

AHL Research noted that the increase was driven by higher prices in food (+8.2%), housing (+12.4%), clothing and footwear (+9.0%), restaurants and hotels (+6.1%), transport (+27.4%), miscellaneous goods and services (+10.9%), household equipment (+7.2%), education (+7.8%), health (+7.9%), communication (+13.5%), recreation and culture (+0.6%), and tobacco (+3.0%).

On a monthly basis, inflation rose mainly due to a 3.0 percent jump in the housing index, reflecting higher electricity charges following a positive FCA of PKR 2.06/KWH. The transport index also increased by 5.7 percent MoM due to higher fuel prices.

Core inflation rose to 8.52 percent YoY in September 2026, compared with 7.27 percent in September 2025. Average core inflation for 1QFY27 stood at 8.57 percent versus 7.31 percent in 1QFY26. Urban core inflation increased to 8.6 percent YoY, while rural core inflation rose to 8.1 percent YoY. On a MoM basis, urban core inflation rose 0.17 percent and rural core inflation rose 0.23 percent.

AHL Research highlighted that the sharp rise in inflation reflects both energy-related adjustments and higher transport costs, with core inflation also showing a steady upward trend across urban and rural areas.