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.
Output gap
The estimated difference between what an economy is producing and what it could sustain using its workers and equipment normally.
What it means
An economy does not always use all the workers, machinery and buildings it has available. Economists compare what it is producing with an estimate of what it could keep producing without putting too much strain on those resources. If actual production is below that estimated level, the output gap is negative. If it is above it, the gap is positive. The sustainable level cannot be observed directly, so different estimates may disagree.
Example
If businesses have spare machinery and people who want work cannot find it, that may point to a negative output gap across the economy. One business with an idle machine would not establish the national figure on its own.
Why it matters
The estimate helps policymakers judge whether more spending might use spare capacity or add pressure to prices. It is an estimate, not a precise reading from a meter.
Related terms
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Aggregate demand
The total demand for goods and services made in an economy.
Read more -
Aggregate supply
The goods and services businesses across an economy can and are willing to provide.
Read more -
Inflation
A general rise in prices over time.
Read more -
Real GDP
A measure of a country's production that removes the effect of changing prices.
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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