Inflation rose to 2.6% in November – the second month in a row where the rate of price increases picked up.
Core inflation (which strips out volatile categories like energy, food, alcohol and tobacco), also rose from 3.5% to 3.6%. Services inflation held steady at 5%, although this was partly driven by a large decrease in airfares – an area the Bank of England is less focused on.
It now looks incredibly unlikely that the Bank of England will cut interest rates tomorrow at its final Monetary Policy Committee meeting of the year.
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Despite this, it wasn’t all bad news. November’s figure was slightly lower than the 2.7% analysts were forecasting. Deutsche Bank’s chief economist Sanjay Raja also pointed out that both core and services CPI were a tenth lower than consensus expectations.
It won’t soften the blow for households up and down the country though, with petrol prices and clothing costs both up and goods inflation back in positive territory.
“It means less money in our pockets and, even with average wage growth still nicely overshooting that figure, cumulatively we’re all still reeling from the impact the last couple of years has had on our finances,” Danni Hewson, head of financial analysis at investment platform AJ Bell, said.
Next UK inflation figures
In the UK, the main measure of inflation is the Consumer Prices Index (CPI). The Office for National Statistics (ONS) releases this once a month. Just one more report is due for 2024 covering December, but this won’t be released until the new year on 15 January.
Release dates for 2025
- 15 January (covering December)
- 19 February (covering January)
- 26 March (covering February)
- 16 April (covering March)
- 21 May (covering April)
- 18 June (covering May)
- 16 July (covering June)
- 20 August (covering July)
- 17 September (covering August)
- 22 October (covering September)
- 19 November (covering October)
- 17 December (covering November)
- 21 January 2026 (covering December)
What time is CPI released in the UK?
The ONS releases the latest CPI data at 07:00 once a month. You can access the data by going onto the ONS website and clicking on its release calendar. All published and upcoming releases are listed there.
The report will be titled, “Consumer price inflation, UK”, followed by the month and year in question.
MoneyWeek regularly reports on the latest inflation data and what it means for you.
What is CPI and how is it calculated?
As introduced previously, CPI is the main measure of inflation used in the UK. It tells you how much the cost of living is going up or down.
It is calculated using a typical basket of household goods and services – from eggs, flour and milk to hotel costs, vinyl records and air fryers. Vinyl records are a recent addition, back in the CPI shopping basket for the first time since 1992 after a resurgence in popularity.
The Bank of England keeps a close eye on CPI when setting interest rates. If inflation is too high, the Bank raises interest rates to slow consumer spending and cool the economy. This works in bringing prices down because households have less money to spend when mortgage rates are high and debts are more expensive to repay.
Meanwhile, if inflation is too low, the Bank may reduce interest rates so that consumers have more disposable income to spend. Thanks to the laws of supply and demand, this pushes prices back up.
Where is inflation heading next?
The path ahead is unlikely to be completely straight. Household energy costs are expected to rise in the first half of 2025, for example, which could add upward pressure.
The Ofgem price cap will rise by 1.2% in January, before potentially rising again in April. The latest forecast from consultancy Cornwall Insight suggests the cap could go up by as much as 2.5%, driven by “market turbulence and price cap reforms”.
Political factors are expected to add to inflationary pressure going forward. In her Budget in October, chancellor Rachel Reeves announced £70 billion in spending policies and £40 billion in tax hikes. One of the main measures announced was an increase to employer National Insurance contributions, which could translate into higher inflation if businesses put prices up to protect their margins.
The National Living Wage will also go up by 6.7% from April – good news for workers but another cost for businesses. Wage growth is a big driver of inflation, and something the Bank of England has been watching closely when deciding when (and how far) to cut interest rates.
Overall, the fiscal watchdog has said it expects Budget policies to push inflation up by 0.4%, once they hit peak effect.
Looking further afield, there are also concerns about what Donald Trump’s second presidency might mean for global trade. Decisions made in the US could have a large impact on prices in the UK and elsewhere across the globe.
Some point out that Trump’s bark is often worse than his bite. However, analysis from the National Institute of Economic and Social Research (NIESR) suggests UK inflation could be 3-4 points higher over the next two years, if Trump imposes the tariffs that have been threatened.
Overall, the Office for Budget Responsibility (OBR) expects inflation to average out at 2.5% in 2024 and 2.6% in 2025. It then expects it to fall to 2.3% in 2026, 2.1% in 2027, 2.1% in 2028 and 2% in 2029.
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