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. With the next CPI report due on Wednesday, 19 February, what can households, savers and investors expect?
“The fact that [December’s] 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. “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.
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Other inflationary risks on the horizon include rising energy prices and tariffs from US 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 is expected to rise again in April. The latest forecast from consultancy Cornwall Insight suggests the cap could go up by as much as 3%.
The rise in employers’ National Insurance contributions from April, combined with a 6.7% increase to the National Living Wage, could also push inflation higher. Some businesses have indicated they are looking to pass these costs on to consumers by raising their prices.
Further afield, US president Donald Trump has already started imposing tariffs on imported products and there are fears this could add to global inflationary pressures if other countries respond and it turns into a full-blown trade war.
US inflation unexpectedly rose to 3% in January, although this was largely driven by higher energy prices. At this stage, it is too early for the inflationary effect of tariffs to be showing up in the data, but experts have warned that each time the average tariff rate goes up by one percentage point, the rate of core US inflation goes up by around 0.1 percentage points.
Meanwhile, in the UK, the Bank of England is now forecasting that inflation will hit 3.7% in the third quarter of 2025, primarily driven by higher energy prices. Not everyone agrees with this outlook, though. In a report published on 12 February, the National Institute of Economic and Social Research (NIESR) said it expects UK inflation to rise to 3.2% in January's report (out on 19 February) before slowly falling back to target. The research institute expects inflation to average out at 2.4% in 2025 as a whole.
We take a more detailed look at the UK inflation outlook in a separate piece.
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