Inflation Rate in the United Kingdom decreased to 3.40 percent in May from 3.50 percent in April of 2025. This dataset provides - United Kingdom Inflation Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

The UK inflation rate was 3.4 percent in May 2025, down from 3.5 percent in the previous month, and the fastest rate of inflation since February 2024. Between September 2022 and March 2023, the UK experienced seven months of double-digit inflation, which peaked at 11.1 percent in October 2022. Due to this long period of high inflation, UK consumer prices have increased by over 20 percent in the last three years. As of the most recent month, prices were rising fastest in the communications sector, at 6.1 percent, but were falling in both the furniture and transport sectors, at -0.3 percent and -0.6 percent respectively.
The Cost of Living Crisis High inflation is one of the main factors behind the ongoing Cost of Living Crisis in the UK, which, despite subsiding somewhat in 2024, is still impacting households going into 2025. In December 2024, for example, 56 percent of UK households reported their cost of living was increasing compared with the previous month, up from 45 percent in July, but far lower than at the height of the crisis in 2022. After global energy prices spiraled that year, the UK's energy price cap increased substantially. The cap, which limits what suppliers can charge consumers, reached 3,549 British pounds per year in October 2022, compared with 1,277 pounds a year earlier. Along with soaring food costs, high-energy bills have hit UK households hard, especially lower income ones that spend more of their earnings on housing costs. As a result of these factors, UK households experienced their biggest fall in living standards in decades in 2022/23. Global inflation crisis causes rapid surge in prices The UK's high inflation, and cost of living crisis in 2022 had its origins in the COVID-19 pandemic. Following the initial waves of the virus, global supply chains struggled to meet the renewed demand for goods and services. Food and energy prices, which were already high, increased further in 2022. Russia's invasion of Ukraine in February 2022 brought an end to the era of cheap gas flowing to European markets from Russia. The war also disrupted global food markets, as both Russia and Ukraine are major exporters of cereal crops. As a result of these factors, inflation surged across Europe and in other parts of the world, but typically declined in 2023, and approached more usual levels by 2024.

In May 2025, the UK inflation rate for goods was two percent and 4.7 percent for services. Prices for goods accelerated significantly, sharply between in 2021 and 2022 before falling in 2023. By comparison, prices for services initially grew at a more moderate rate, but have also not fallen as quickly. The overall CPI inflation rate for the UK reached a recent high of 11.1 percent in October 2022 and remained in double-figures until April 2023, when it fell to 8.7 percent. As of this month, the UK's inflation rate was 2.6 percent, down from 2.8 percent in the previous month. Sectors driving high inflation In late 2024, communication was the sector with the highest inflation rate, with prices increasing by 6.1 percent as of December 2024. During the recent period of high inflation that eased in 2023, food and energy prices were particular high, with housing and energy inflation far higher than in any other sector, peaking at 26.6 percent towards the end of 2022. High food and energy prices since 2021 have been one of the main causes of the cost of living crisis in the UK, especially for low-income households that spend a higher share of their income on these categories. This is likely one of the factors driving increasing food bank usage in the UK, which saw approximately 3.12 million people use a food bank in 2023/24, compared with 1.9 million just before the COVID-19 pandemic. The global inflation crisis The UK has not been alone in suffering rapid price increases since 2021. After the start of the COVID-19 pandemic, a series of economic and geopolitical shocks had a dramatic impact on the global economy. A global supply chain crisis failed to meet rising demand in 2021, leading to the beginning of an Inflation Crisis, which was only exacerbated by Russia's invasion of Ukraine in February 2022. The war directly influenced the prices of food and energy, as both countries were major exporters of important crops. European imports of hydrocarbons from Russia were also steadily reduced throughout 2022 and 2023, resulting in higher energy prices throughout the year.

Core consumer prices in the United Kingdom increased 3.50 percent in May of 2025 over the same month in the previous year. This dataset provides - United Kingdom Core Inflation Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

In 2024, the annual inflation rate for the United Kingdom was 2.5 percent, with the average rate for 2025 predicted to rise to 3.2 percent, revised upwards from an earlier prediction of 2.6 percent. The UK has only recently recovered from a period of elevated inflation, which saw the CPI rate reach 9.1 percent in 2022, and 7.3 percent in 2023. Despite an uptick in inflation expected in 2025, the inflation rate is expected to fall to 2.1 percent in 2026, and two percent between 2027 and 2029. UK inflation crisis Between 2021 and 2023, inflation surged in the UK, reaching a 41-year-high of 11.1 percent in October 2022. Although inflation fell to more usual levels by 2024, prices in the UK had already increased by over 20 percent relative to the start of the crisis. The two main drivers of price increases during this time were food and energy inflation, two of the main spending areas of UK households. Although food and energy prices came down quite sharply in 2023, underlying core inflation, which measures prices rises without food and energy, remained slightly above the headline inflation rate throughout 2024, suggesting some aspects of inflation had become embedded in the UK economy. Inflation rises across in the world in 2022 The UK was not alone in suffering from runaway inflation over the last few years. From late 2021 onwards, various factors converged to encourage a global acceleration of prices, leading to the ongoing inflation crisis. Blocked-up supply chains were one of the main factors as the world emerged from the COVID-19 pandemic. This was followed by energy and food inflation skyrocketing after Russia's invasion of Ukraine. Central bank interest rates were raised globally in response to the problem, possibly putting an end to the era of cheap money that has defined monetary policy since the financial crash of 2008.

Services Inflation in the United Kingdom decreased to 4.70 percent in May from 5.40 percent in April of 2025. This dataset includes a chart with historical data for the United Kingdom Services Inflation.

Cost of food in the United Kingdom increased 4.40 percent in May of 2025 over the same month in the previous year. This dataset provides the latest reported value for - United Kingdom Food Inflation - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

The core inflation rate for the UK was 3.8 percent in April 2025, up from 3.4 percent in the previous month. Core inflation measures inflation without food and energy prices, which can be far more volatile than inflation for other goods and services.

The inflation rate for the Retail Price Index (RPI) in the United Kingdom was 4.3 percent in May 2025, down from 4.5 percent in the previous month. From 2021 onwards, prices in the UK rose rapidly, with the RPI inflation rate peaking at 14.2 percent in October 2022. Although inflation fell in subsequent months, it wasn't until July 2023 that inflation fell below double digits, and as of late 2024, the RPI rate was still above three percent. The CPI and CPIH While the retail price index is still a popular method of calculating inflation, the consumer price index (CPI) is the current main measurement of inflation in the UK. There is also an additional price index, which includes some extra housing costs, known as the Consumer Price Index including homer occupiers' costs (CPIH) index, which is seen by the UK's Office of National Statistics as the official inflation rate. As of December 2024, the CPI inflation rate stood at 2.5 percent, while the CPIH rate was 3.5 percent. Core inflation down in 2024 Another way of measuring inflation is to strip out the volatility of energy and food prices and look at the underlying core inflation rate. As of December 2024, this was 3.2 percent, slightly higher than the overall CPI rate, but more aligned with the overall figure than it was in 2022 and 2023. When inflation peaked at 11.2 percent in October 2022, for example, core inflation stood at just 6.5 percent. After energy prices in 2023 fell relative to 2022, the overall inflation rate in the UK declined quite rapidly, with core inflation overtaking the overall rate in July 2023. During the most recent period of high inflation, core inflation peaked at 7.1 percent in May 2023, and while taking longer to fall than the overall figure, has generally been declining since then.

Core Inflation Rate MoM in the United Kingdom decreased to 0.20 percent in May from 1.40 percent in April of 2025. This dataset includes a chart with historical data for the United Kingdom Core Inflation Rate MoM.

In May 2025, the Consumer Price Index including owner occupiers' housing costs (CPIH) inflation rate of the United Kingdom was **** percent, down from *** percent in the previous month. The inflation rate fell noticeably after the COVID-19 pandemic, but rose sharply between Spring 2021 and Autumn 2022. After peaking at *** percent in October 2022, CPIH inflation declined throughout 2023 and into 2024, falling to *** percent by September of that year, before increasing again recently. Cost of living problems persist into 2025 Although it is likely that the worst of the recent inflation surge may have passed, the issues caused by it look set to linger into 2025 and beyond. While the share of households experiencing living cost rises has fallen from ** percent in August 2022, to ** percent in July 2024, this share rose towards the end of the year, with more than half of households reporting rising costs in December. Even with lower inflation, overall consumer prices have already increased by around ** percent in the last three years, rising to almost ** percent for food prices, which lower income households typically spend more of their income on. The significant increase in people relying on food banks across the UK, is evidence of the magnitude of this problem, with approximately **** million people using food banks in 2023/**. Other measure of inflation While the CPIH inflation rate displayed here is the preferred index of the UK's Office of National Statistics, the Consumer Price Index (CPI) is often more prominently featured in the media in general. An older index, the Retail Price Index (RPI) is also still used by the government to calculate certain taxes, and rail fare rises. Other metrics include the core inflation rate, which measures prices increases without the volatility of food and energy costs, while price increases in goods and services can also be tracked separately. The inflation rate of individual sectors can also be measured, and as of December 2024, prices were rising fastest in the communications sector, at *** percent, with costs falling in the transport and furniture sectors.

Energy Inflation in the United Kingdom decreased to -1.70 percent in May from -0.90 percent in April of 2025. This dataset includes a chart with historical data for the United Kingdom Energy Inflation.

In May 2025, the UK's consumer price index grew by *** percent when compared with the previous month. In April 2025, month-on-month inflation grew by *** percent, the fastest rate of inflation in this provided time period.

The Consumer Price Index of the United Kingdom was 136 in the first quarter of 2025, indicating that consumer prices have increased by 36 percent when compared with the first quarter of 2015. As of March 2025, the inflation rate for the CPI was 2.6 percent, a slight fall from the previous month. A long period of elevated inflation between 2021 and 2023 peaked in October 2022, and saw prices increase by over 20 percent in just three years. Uptick in inflation expected in 2025 In late 2024, the UK's main economic forecaster; the Office for Budget Responsibility, predicted that the annual inflation rate for 2025 would average out at around 2.6 percent. In March 2025, however, the OBR revised this figure upward, with annual inflation now expected to be 3.2 percent. This uptick in inflation is predicted to peak in the third quarter of the year at 3.7 percent, before falling to two percent by the second quarter of 2026. Although this period of higher inflation is predicted to be far less severe than in 2022, it will no doubt put further pressure on households already struggling with their cost of living. Cost of living woes continue The share of UK households reporting that their cost of living was increasing has been steadily rising since Summer 2024. At that time, less than half of UK households reported rising costs, down from 91 percent two years earlier. As of March 2025, however, 59 percent of households said their costs were rising, the highest figure since 2023. Of these households, 93 percent reported that their food shop was increasing, with three quarters of them reporting higher energy costs. With higher inflation predicted in 2025, the pressure on UK households will likely continue, although a crisis on the scale of 2021-2023 will hopefully be avoided.

The Business Confidence Index (BCI) of the United Kingdom was 99.3 in April 2025, compared with 99.1 in the previous month, an indication that business confidence is growing in the UK. During this time period, business confidence was highest in late 2021, and was at its lowest point in March 2009. Taxation overtakes inflation as main business concern In the third quarter of 2023, inflation was seen by 65 percent of UK firms as a major external concern facing their business. At that time, the UK's inflation rate was still at the relatively high figure of 6.7 percent, although this was down from a peak of 11.1 percent in October 2022. As the rate of inflation continued to fall in 2024, the issue became slightly less pressing for UK businesses, with 49 percent seeing it as a main concern in the second quarter of 2024, although it was still ahead of other issues. In the second half of 2024, however, taxation has emerged as the main worry for UK firms, with 63 percent of businesses citing it as an external concern in the fourth quarter of 2024. This is likely related to the rise in National Insurance businesses will have to pay from April 2025 onwards, one of the main measures announced in the Autumn Budget in October 2024. UK business demographics In 2024, there were approximately 5.5 million private business enterprises in the UK, which was down from a peak of 5.98 million in 2020. As of this year, the UK's private sector workforce was around 27.6 million, compared with 6.1 million who worked in the public sector. While most businesses in the UK are small enterprises that employ fewer than ten people, the UK's large businesses are responsible for employing a large share of the workforce, with around 8.2 million people working for large businesses in 2024. The biggest UK-based company, in terms of global employees in 2024 was the Compass Group, with a global workforce of around half a million, followed by Tesco at 345,000 employees.

Rent Inflation in the United Kingdom decreased to 6.10 percent in May from 6.30 percent in April of 2025. This dataset includes a chart with historical data for the United Kingdom Rent Inflation.

Inflation Expectations in the United Kingdom decreased to 3.90 percent in June from 4 percent in May of 2025. This dataset provides - United Kingdom Inflation Expectations- actual values, historical data, forecast, chart, statistics, economic calendar and news.