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.
Key term
What it means
A government decides how much tax to raise, which public services and benefits to pay for, and how much to borrow when spending exceeds income. Together, these choices are fiscal policy. Changes can support the economy, pay for services or affect how money is shared across society. This is distinct from monetary policy, which includes decisions about interest rates made by the Bank of England.
Example
If the government increases funding for a public service and changes a tax to help pay for it, both decisions are fiscal policy. How much it borrows may also change.
Why it matters
Tax and spending decisions affect bills, services, jobs and the public finances, so it helps to recognise them as connected choices.
Related terms
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Automatic stabilisers
Parts of the tax and benefit system that respond to a weaker or stronger economy without a new policy decision.
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Budget deficit
The gap when the government and wider public sector spend more than they receive over a period.
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Fiscal rules
Targets or limits a government sets for borrowing, debt or other measures of the public finances.
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Means testing
Checking a person's income and sometimes savings to decide whether they qualify for help or how much they receive.
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Monetary policy
Decisions by a central bank about interest rates and other tools to influence spending and the pace at which prices rise.
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Primary deficit
The gap when public spending, excluding debt interest, is greater than public income.
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Progressive tax
A tax under which people with more income pay a larger share of it in tax.
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Public spending per person
Public spending divided by the number of people it covers.
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Tax expenditure
Support provided through a targeted tax break instead of a direct payment from public funds.
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Keep in the loop
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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