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
Inflation is usually reported as how much prices have risen over the past year. The figure looks at a wide range of things people buy, so it may not match the change in your own bills. If the inflation rate falls from 6% to 3%, prices are still rising, just more slowly.
Example
If a basket of everyday items costs £100 one year and £103 the next, the price of that basket has risen by 3%.
Why it matters
Rising prices can make wages and savings buy less than they used to.
Related terms
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Absolute poverty
Having a household income below a line set using a reference year and then adjusted as prices change.
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Aggregate demand
The total demand for goods and services made in an economy.
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Aggregate supply
The goods and services businesses across an economy can and are willing to provide.
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Bank Rate
The main interest rate set by the Bank of England, which influences rates on borrowing and saving.
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Base effects
The effect an unusually high or low starting figure can have on a percentage change reported later.
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Consumer Prices Index (CPI)
A UK measure of how prices change for a wide range of things people buy.
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Consumer Prices Index including housing costs (CPIH)
A UK measure of price changes like CPI, with an added measure of the cost of living in a home you own and Council Tax.
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Core inflation
A measure of inflation that leaves out certain prices, usually food, energy, alcohol and tobacco in UK figures.
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Deflation
A fall in the overall level of prices, rather than a fall in just one price.
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Disinflation
A slowdown in how quickly prices are rising.
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Fiscal drag
When rising incomes lead to more tax because tax-free amounts or tax thresholds have not kept up.
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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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Nominal wages
Pay measured in pounds, without adjusting for changes in prices.
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Output gap
The estimated difference between what an economy is producing and what it could sustain using its workers and equipment normally.
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Purchasing power
How much you can buy with a given amount of money.
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Quantitative easing
A central bank creating electronic money to buy bonds, aiming to lower longer-term borrowing costs and support spending.
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Real interest rate
An interest rate adjusted for the change in prices, showing what borrowing or saving costs in purchasing power.
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Real terms
A way of comparing money in different years after allowing for changes in prices.
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Real wages
Pay measured by what it can buy after allowing for changes in prices.
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Retail Prices Index (RPI)
An older UK measure of consumer price changes that is still used for some payments and contracts.
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Wage growth
How much pay has risen or fallen compared with an earlier time.
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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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