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Inflation in the UK: Economic indicators

Economic indicators are quick-read summaries of the latest data focusing on different aspects of the UK economy. The full suite of indicators can be found on the main Economic Indicators page.

Inflation is the rate at which the general price level of the economy increases. This is usually shown as an annual percentage change in consumer prices – the prices consumers pay for goods and services – and affects what is often described as the cost of living.

Latest inflation data

The CPI annual inflation rate was 2.9% in July, up from 2.6% in June. The largest upward contributions came from housing and household services, and furniture. Food price inflation was 1.3% in July, down from 1.7% in June, and the lowest since August 2024.

Source: ONS, CPI annual inflation rate, series D7G7, monthly data up to July 2026

UK inflation rose almost continuously from under 1% in early 2021 to 11.1% in October 2022, a 41-year high, before easing over the following two years. Further detail on the factors that lead to this period of high inflation is covered in the Library research briefing, Rising cost of living in the UK.

Inflation forecasts

The conflict in the Middle East and the associated rise in energy prices is expected to lead to higher UK inflation. Prior to the conflict the CPI annual inflation rate was expected to fall to around 2% from April and remain around 2% for the rest of 2026.

On 30 July, the Bank of England’s central projection showed CPI inflation peaking at around 3.2% in 2026 Q4, although the Bank’s Monetary Policy Committee said that “risks to the inflation outlook [in this scenario] are tilted to the upside”.

The Bank of England’s Monetary Policy Committee (MPC) sets interest rates in the UK. The government has given the MPC a remit to target an inflation rate of 2% over the “medium term” – usually thought of as a few years’ time. For latest information on interest rates, see the Library briefing, Interest Rates and Monetary Policy: Key Economic Indicators.

Underlying measures of inflation

The annual rate of so-called “core inflation”, which excludes the volatile energy and food components of the CPI, peaked at 7.1% in May 2023, its highest rate since 1992. It has since fallen. It was 2.6% in July 2026, unchanged from June, but down from 3.1% at the beginning of the year in January. 

Services inflation also hit a 31-year high of 7.4% in spring/summer 2023, before easing. It was 3.4% in July 2026, down from 3.6% in June, and down from 4.4% at the beginning of the year in January. The Bank of England pays close attention to services prices when setting interest rates, as they are seen as less exposed to global factors and more dependent on domestic costs. Inflation in services is also considered to be more persistent than inflation in goods.

Sources: ONS, CPI measure of inflation, series DKO8 (core) and D7NN (services); monthly data up to July 2026

RPI measure of inflation

The CPI is the main measure of inflation in the UK. The Retail Prices Index (RPI) is no longer classified as a National Statistic because it has technical deficiencies in how it is calculated. However, it is still used to uprate certain items (such as rail ticket prices and student loans). The RPI annual inflation rate was 3.2% in July 2026.

Sources: ONS, CPI and RPI annual inflation rate, series D7G7 and CZBH, monthly data up to July 2026

Next updates

This page is updated when new data is published. The next source updates will be:

• ONS, Consumer Price Inflation, 16 September 2026