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.
Real terms
A way of comparing money in different years after allowing for changes in prices.
Key term
What it means
£100 now does not necessarily buy what £100 bought years ago. A figure in real terms has been adjusted for price changes to make the comparison more meaningful. A figure in pounds as they were actually paid, with no such adjustment, is in nominal terms. The result can vary with the price measure used.
Example
If pay rises from £100 to £110 while prices also rise by 10%, pay has risen in pounds but has not risen in real terms: it buys roughly the same amount.
Why it matters
Without this adjustment, a rise in prices can make pay or spending look as though it grew more than it really did in purchasing power.
Also known as
inflation-adjusted
Related terms
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Inflation
A general rise in prices over time.
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Nominal wages
Pay measured in pounds, without adjusting for changes in prices.
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Public spending per person
Public spending divided by the number of people it covers.
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Purchasing power
How much you can buy with a given amount of money.
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Real GDP
A measure of a country's production that removes the effect of changing prices.
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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 wages
Pay measured by what it can buy after allowing for changes in prices.
Read more
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
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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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