Fuel and travel costs are pushing prices up again
Thursday 5 November 2026
Inflation has risen to 3.1%, meaning everyday spending is getting more expensive just as household budgets are already under pressure.
Economic rent
An earning above the amount needed to keep a person or resource in its current use.
What it means
In economics, rent means an extra return above the best realistic alternative, rather than necessarily the monthly payment for a home. A scarce location, exclusive right or special advantage may bring in more than its owner would need to earn to keep using it that way. The difference is called economic rent. It can arise without anyone doing anything illegal; deciding how large it is requires an estimate of what the next-best use would earn.
Example
In a made-up example, a site earns its owner £30,000 a year after costs in its current use. If its best alternative use would earn £10,000 after costs, the extra £20,000 is economic rent under those assumptions. This does not mean a tenant pays £20,000 in housing rent.
Why it matters
It helps explain why ownership of a scarce asset can bring rewards beyond what is needed to keep it in use, and why “rent seeking” refers to securing such rewards.
Related terms
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Barriers to entry
Obstacles that make it hard for a new business to start competing in a market.
Read more -
Market power
A business's ability to influence prices or conditions because customers or suppliers have limited alternatives.
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Rent seeking
Trying to gain or protect an extra reward by securing an advantage, rather than by providing more or better goods or services.
Read more -
Windfall profits
Profits that rise unexpectedly because of an outside event rather than a planned improvement by the business.
Read more
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News
Highlights from about the UK economy, the UK government and the UK public sector.
Mortgage relief will have to wait a little longer
Wednesday 4 November 2026
Interest rates are staying at 3.75%, so households with mortgages and other borrowing may have to wait longer for costs to come down.
Energy bills are going up as winter approaches
Wednesday 4 November 2026
A higher energy price cap means many households will be paying more to heat and power their homes during the colder months.
Guides and insights
Analysis
Clear, accessible analysis of the economic issues shaping everyday life
Living standards
What does a day’s work buy?
Comparing the cost of everyday life across generations, from bread and beer to buying a home.
Food & prices
The journey behind your grocery bill
How farming, energy, transport and supermarket competition shape the price on the shelf.
Prices & inflation
Inflation is falling. What happens next?
What slower price rises mean for wages, purchasing power and economic recovery.
Shared prosperity
What would shared prosperity look like?
Beyond GDP: how we could measure economic success through security, opportunity and living standards.
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