in the United Kingdom reached a 41-year-high of 11.1 percent in October 2022. Rising
and energy costs were responsible for much of this increase, with the inflation rate for
reaching 26.6 percent this month. Although inflation did fall from 10.1 percent to four percent throughout 2023, this was still high compared to previous years. After a long period of relatively low inflation,
. The global
, a knock-on effect of the COVID-19 pandemic, was one of the main reasons for the sudden onset of high inflation, followed by the
, which disrupted the price of essential commodities in the food and energy market.
UK households continue to face challenges going into 2024
In January 2024, around half of households in the UK reported that their
cost of living had increased when compared to a year earlier. Although this was down from 76 percent of households in April 2023, and 91 percent in August 2022, it is evident that many UK households are still under severe financial pressure. The
main reason people gave for their cost of living increase was that their food shop had increased, with the second-most common reason being rising energy bills. Since 2022,
energy bills for millions of UK households have risen dramatically due to the limits that suppliers can charge consumers per unit of energy (the energy cap) rising consistently. Although
wages have been growing, wage growth did not keep up with inflation between October 2021 and June 2023, with wages recently growing by 6.2 percent in December 2023, compared with the CPI inflation rate of four percent. Due to the crisis, people in the UK have taken
measures to curb their spending, such as spending less on non-essentials and using less gas and electricity in their homes
CPI, CPIH and RPI
In the UK, the three main inflation indices are the Consumer Price Index
(CPI) , the Consumer Price Index including owner-occupiers' housing costs (
CPIH), and the Retail Price Index
(RPI). Although the CPI is the most recognizable of these three figures, the Office of National Statistics (ONS) promote the use of the CPIH as a more reliable indicator, as it includes some housing costs that the CPI does not. The RPI has been used for a longer period of time than the other two measures, but is seen to be outdated and flawed and has not been an official statistic since 2013. In general, the CPI is the most referenced figure despite the introduction of the CPIH and the historical context provided by the RPI. Although no longer classed as a national statistic, the UK government still uses the RPI rate to calculate annual
rail fare increases and interest on
student loan debt. As the RPI typically overstates inflation the UK government's continued usage of the index is controversial, especially as the CPI rate is used by them more often, such as for calculating
pension payments.
This text provides general information. Statista assumes no
liability for the information given being complete or correct.
Due to varying update cycles, statistics can display more up-to-date
data than referenced in the text.
