There was a surprise drop in the rate of UK inflation in December. The Consumer Prices Index (CPI) rose by 2.5% on an annual basis, down from 2.6% in November.
The next report will be published on Wednesday, 19 February. What can households, savers and investors expect?
“The fact headline CPI has come in below expectation and has even fallen a bit is cause for a degree of celebration,” says Danni Hewson, head of financial analysis at AJ Bell.
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“But it’s important not to over egg this pudding and not to forget the potential for another inflation spike if businesses do pass on those extra costs coming their way in April,” she adds.
Hewson is referring to the employer National Insurance hike announced by chancellor Rachel Reeves in the Autumn Budget.
Sixty-seven percent of retailers have said they are planning to raise their prices in response to this change, according to a survey from the British Retail Consortium.
Other inflationary risks on the horizon include rising energy prices and potential tariffs from incoming president Donald Trump.
We share a list of this year’s CPI dates before delving further into the inflation outlook for 2025.
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. Each reading covers the previous month.
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 increased by 1.2% in January, and will potentially rise again in April. The latest forecast from consultancy Cornwall Insight suggests the cap could go up by as much as 3%, driven by geopolitical instability, price cap reforms, and uncertainty over US liquified natural gas exports under a second Trump presidency.
Political factors in the UK are also expected to add to inflationary pressure going forward. In the Autumn Budget in October, chancellor Rachel Reeves announced £70 billion in spending policies and £40 billion in tax hikes.
In addition to the National Insurance hike introduced previously, the National Living Wage will also go up by 6.7% from April. This is 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 could mean for global trade. Trump has threatened to impose wide-ranging tariffs, which could disrupt supply chains and push prices higher in the UK and elsewhere across the globe.
“Unlike his first administration where tariffs were introduced on specific sectors, during the election campaign, Donald Trump threatened to introduce universal tariffs of 10-20% on all imports (and up to 60% in the case of Chinese imports),” says Jason Hollands, managing director at Bestinvest, the investment platform.
“If such measures are quickly introduced, this would prove a significant financial shock,” he adds.
Overall, the Office for Budget Responsibility (OBR) has said it expects inflation to average out at 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.
These OBR figures were published alongside the Budget in October, but could change if factors on the global stage cause increased geopolitical volatility.
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