The Consumer price inflation in United Kingdom attained a value of 2.50 % in 2024
The indicator recorded a historical change (bps difference) of 2 bps between 2021 to 2024, and is expected to decline by...
GlobalData projects the figure to change by 97 bps between 2025 and 2029, reaching...
Inflation
Inflation is an upsurge in the level of prices of the goods and services in an economy, which leads to a decline in the purchasing power of the currency’s value. It is calculated as the rate of change in prices in a specific period. The consumer price index (CPI) is one of the most common indicators for measuring inflation in an economy.
Global Inflation
Global inflation is a measure of the average annual rate of growth increase in national prices across all countries. It can be calculated using various methods including simple average, weighted average, and median price change. Global Data forecasts that the world economy will grow at a slower pace of 3.5% in 2022 following a 5.9% growth in 2021. On the other hand, the global inflation rate is projected to rise to 6.5% in 2022 from 3.5% in the previous year due to supply chain disruption amid the Ukraine-Russia war.
Consumer Price Inflation in the UK
Between 2018-2021, the consumer price inflation in the UK was highest in the year 2021, reaching 2.6%, an increase of 1.58 % over the previous year 2020. Between 2018 to 2021, the UK’s consumer Inflation decreased by 0.1%.
The inflation rate shot up to 2.6% in 2021, due to supply chain constraints and lockdowns amid pandemics. GlobalData forecasts the inflation rate to rise even further to 6.6% in 2022 amid higher energy costs and high commodity prices. In March 2022, the inflation rate in the UK rose to 6.2%, which is the highest in the last 30 years. The Bank of England hiked its key policy rate to 0.75% in March 2022 to curb inflationary pressures.
Amid the Russia-Ukraine war, oil prices have skyrocketed, thereby resulting in a multiplier effect on food and commodity prices. Rising utility bills and a surge in prices of natural gas across the UK will likely put more inflationary pressure on the economy.
Factors that Impact Inflation Rate
Some of the major factors affecting consumer prices are government policies, money supply, consumer spending, employment levels, high disposable income, and wage levels. Interest rates can also have a significant impact on spending on consumer goods.
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