The UK economy

27 Nov The UK economy

As of the most recent month, prices were rising fastest in the education sector, at 7.5percent, with prices increasing at the slowest rate in the clothing and footwear sector. One of the main consequences of high inflation and low wage growth throughout 2022 and 2023 was an increase in industrial action in the UK. In December 2022, for example, there were approximately 830,000 working days lost due to labor disputes.

While the retail price index is still a popular method of calculating inflation, the consumer price index (CPI) is the current main measurement of inflation in the UK. In 2024, the average salary for full-time workers in the UK was 37,430 British pounds a year, up from 34,963 in the previous year. In London, the average annual salary was far higher than the rest of the country, at 47,455 pounds per year, compared with just 32,960 in North East England. There also still exists a noticeable gender pay gap in the UK, which was seven percent for full-time workers in 2024, down from 7.5 percent in 2023.

• Between September 2022 and March 2023, the UK experienced seven months of double-digit inflation, which peaked at 11.1 percent in October 2022.
• While the retail price index is still a popular method of calculating inflation, the consumer price index (CPI) is the current main measurement of inflation in the UK.
• The war also disrupted global food markets, as both Russia and Ukraine are major exporters of cereal crops.
• During the most recent period of high inflation, core inflation peaked at 7.1 percent in May 2023, and while taking longer to fall than the overall figure, has generally been declining since then.

Average weekly earning growth in the UK compared with inflation 2015-2025

In the three months to September 2025, average weekly earnings in the United Kingdom grew by 4.6 percent. non gamstop casinos In the same month, the inflation rate for the Consumer Price Index was 3.6 percent, indicating that wages were rising faster than prices that month. In 2024, the annual inflation rate for the United Kingdom was 2.5 percent, with the average rate for 2025 predicted to rise to 3.5 percent, revised upwards from an earlier prediction. The UK has only recently recovered from a period of elevated inflation, which saw the CPI rate reach 9.1 percent in 2022, and 7.3 percent in 2023. Despite an uptick in inflation in 2025, the inflation rate is expected to fall to 2.5 percent in 2026, and two percent between 2027 and 2029.

CPI annual inflation rate UK 2019-2030

Between 1961 and 1990, temperatures in England averaged nine degrees Celsius, and from 2013 to 2022, average temperatures in the country had increased to 10.3 degrees Celsius. Although the Retail Price Index is a commonly utilized inflation indicator, the UK also uses a newer method of calculating inflation, the Consumer Price Index. The CPI, along with the CPIH (Consumer Price Index including owner occupiers’ housing costs) are usually preferred by the UK government, but the RPI is still used in certain instances. Increases in rail fares for example, are calculated using the RPI, while increases in pension payments are calculated using CPI, when this is used as the uprating factor. The use of one inflation measure over the other can therefore have a significant impact on people’s lives in the UK.

As of December 2024, this was 3.2 percent, slightly higher than the overall CPI rate, but more aligned with the overall figure than it was in 2022 and 2023. When inflation peaked at 11.2 percent in October 2022, for example, core inflation stood at just 6.5 percent. After energy prices in 2023 fell relative to 2022, the overall inflation rate in the UK declined quite rapidly, with core inflation overtaking the overall rate in July 2023. During the most recent period of high inflation, core inflation peaked at 7.1 percent in May 2023, and while taking longer to fall than the overall figure, has generally been declining since then. Following the initial waves of the virus, global supply chains struggled to meet the renewed demand for goods and services.