Inflation rose to 2.3% in October, ending a brief stint below the Bank of England’s 2% target. Analysts had warned of the increase after energy prices surged 10% at the start of October, however the figure still came in slightly higher than the 2.2% forecast.
Going forward, energy prices are expected to rise by another 1% from January before falling back slightly in April 2025, according to the latest forecasts from consultancy Cornwall Insight. They remain significantly lower than they were at the peak of the cost-of-living crisis, but have not returned to pre-crisis levels.
“At 2.3%, inflation is only slightly above the Bank’s 2% target but it does disrupt a three-month downward trend,” says Danni Hewson, head of financial analysis at AJ Bell. Market expectations for a December rate cut are now low at 16%.
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“The fact that core inflation edged up a touch, with the service sector the most watched part of that equation, will give the nine people on the committee pause for thought,” Hewson adds.
Services account for around 80% of UK economic output, making this an important area of focus for the Bank of England as it assesses the persistence of domestic inflationary pressures.
If you are following each CPI release, these are the key dates you need to know. For the outlook on interest rates and details of when the Bank of England will next meet, see: “When will UK interest rates fall further?” and “When is the next Bank of England base rate meeting?”
Next UK inflation figures
In the UK, the main measure of inflation is the Consumer Prices Index. The Office for National Statistics (ONS) releases this once a month. Two more reports are due for 2024.
Release dates for 2024
- 18 December (covering November)
- 15 January 2025 (covering December)
Release dates for 2025
- 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?
Each month, the ONS releases the latest CPI data at 07:00. 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 you are looking for 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 mentioned 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 back in the CPI shopping basket for the first time since 1992 after a recent 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. The Bank of England has said it expects inflation to “edge up to about 2.75% towards the end of the year before falling again”.
Meanwhile, 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.
Political factors are expected to add to inflationary pressure going forward. In her Budget last month, 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% at their 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.
