CPI quarterly inflation rate UK 2019-2029

After reaching a peak of 10.7 percent in the fourth quarter of 2022, the CPI inflation rate in the United Kingdom has fallen considerably, and is expected to fall to two percent by the second quarter of 2024. From 2024 until 2029, the inflation rate is expected to be far more stable than between 2021 and 2023, fluctuating between 1.6 percent and two percent.

Inflation and the Cost of Living 

The high inflation experienced by the UK since late 2021 is one of the main factors behind the country's ongoing cost of living crisis. Price surges, in relation to food and energy costs in particular, played havoc with the finances of UK households. At the height of the crisis, around nine out of ten households were experiencing a cost of living increase compared to the previous month. Although inflation has eased since reaching a peak of 11.1 percent in October 2022, and wages have finally started to grow in real terms, the economic fallout from the crisis may be crucial in deciding who governs the UK at the next election.

Economy the main issue for UK voters in 2024

Although there is currently no set date for the next UK general election, it is generally expected to take place in the second half of 2024. Recent polls put the ruling Conservative party in a precarious position, trailing their rivals the Labour Party by 30 points in May 2024. Crucially for the Labour Party, they are seen as the best party at handling the economy, which has consistently been the main issue for UK voters for several months. The UK economy's return to growth in the first quarter of 2024, along with falling inflation, may not be enough to change this perception by the time voters go to the polls.