Inflation in United Kingdom
The United Kingdom saw inflation in line with the Central Bank's target of 2% on average in the previous decade. Inflation remained relatively stable until 2016 but began to rise post-Brexit due to currency depreciation. The COVID-19 pandemic further influenced inflation, leading to a significant spike in 2021-2022, driven by supply chain disruptions and increased consumer demand.
Consumer price inflation in the United Kingdom averaged 2.4% in the ten years to 2022, above the Major Economies' regional average of 2.1%. The 2022 average figure was 9.1%. For more inflation information, visit our dedicated page.
United Kingdom Inflation Chart
United Kingdom Inflation Data
2018 | 2019 | 2020 | 2021 | 2022 | |
---|---|---|---|---|---|
Inflation (CPI, ann. var. %, aop) | 2.5 | 1.8 | 0.9 | 2.6 | 9.1 |
Inflation (CPI, ann. var. %, eop) | 2.1 | 1.3 | 0.6 | 5.4 | 10.5 |
Inflation (PPI, ann. var. %, aop) | 3.4 | 1.4 | -1.0 | 5.2 | 16.0 |
Inflation remains steady in January
Inflation came in at 4.0% in January, unchanged from December’s result and twice the Bank of England’s 2.0% target. However, the reading was below market expectations. Looking at the details of the release, lower price pressures for food were offset by smaller drops in housing and transport costs. The trend pointed down, with annual average inflation coming in at 6.8% in January (December: 7.3%). Meanwhile, core inflation edged down to 5.0% in January, from the previous month's 5.1%. Finally, consumer prices fell 0.58% in January over the previous month, contrasting the 0.42% increase recorded in December. January's result marked the weakest reading since January 2019.
Our Consensus is for inflation to fall sharply in the coming quarters on a higher base effect and an expected loosening of the labor market, but to remain slightly above the Bank’s target.
On the outlook, Berenberg’s Kallum Pickering said: “Due to the rapid acceleration in price growth through 2022 and H1 2023, yoy inflation rates remain inflated by base effects – and hence give a distorted picture of the recent trend in prices. [...] the picture is completely different on a six-month basis. With almost no change in the overall price level between August and January, six-month annualised inflation has hovered around 1% in the previous three prints. [...] Short of another major supply shock to prices, yoy rates of headline and core inflation look set to fall rapidly further over coming months as base effects fully wash out.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects British inflation projections for the next ten years from a panel of 49 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable inflation forecast available for British inflation.
Download one of our sample reports to visualize what a Consensus Forecast is and see our British inflation projections.
Want to get access to the full dataset of British inflation forecasts? Send an email to info@focus-economics.com.
Latest Global Inflation News
-
Inflation fell to 3.0% in March, down from February’s 3.3%. March’s figure represented the weakest inflation rate since July 2021....
-
Austria: Harmonized inflation rises in March
Harmonized inflation ticked up to 4.1% in March, slightly above February’s 4.0%. Looking at the details of the release, housing... -
Belgium: Harmonized inflation comes in at highest level since March 2023 in March
Harmonized inflation came in at 3.8% in March, which was up from February’s 3.6%. March’s reading represented the highest inflation... -
Italy: Harmonized inflation rises in March
Harmonized inflation increased to 1.2% in March from February’s 0.8%. March’s figure marked the highest inflation rate since October 2023.... -
Portugal: Harmonized inflation comes in at highest level since October 2023 in March
Harmonized inflation came in at 2.6% in March, up from February’s 2.3%. March’s result was the highest inflation rate since... -
Luxembourg: Harmonized inflation remains stable in March
Harmonized inflation came in at 3.2% in March, matching February’s reading. The result was driven by moderating price pressures for... -
Netherlands: Harmonized inflation comes in at highest level since August 2023 in March
Harmonized inflation rose to 3.1% in March, above February’s 2.7%. March’s result marked the highest inflation rate since August 2023....