UK Inflation Rate 2025
Consumer Price Index Categories
| Category | Current 12 month Rate | CPI Weight (%) | 01 | Food and non-alcoholic beverages | 13.6% | 9.6% | 02 | Alcoholic beverages and tobacco | 10.5% | 3.5% | 03 | Clothing and footwear | 7% | 4.8% | 04 | Housing, water, electricity, gas and other fuels (Inc OOH) | 5.7% | 30.3% | 05 | Furniture, household equipment and maintenance | 5.1% | 5.6% | 06 | Health | 8.6% | 1.8% | 07 | Transport | -0.7% | 11.1% | 08 | Communication | 8.1% | 1.9% | 09 | Recreation and culture | 6% | 11.2% | 10 | Education | 3.2% | 2.3% | 11 | Restaurants and hotels | 8.3% | 11.2% | 12 | Miscellaneous goods and services | 5.3% | 6.7% |
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Council tax and rates
| Category | Current 12 month Rate | CPI Weight (%) | 04.9 | Council tax and rates | 5.1% | 2.7% |
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Value after Inflation over time (starting at £1 in 1988)
6.3 %
Everything
6.3 %
Goods
6.1 %
Services
5.9 %
All items excluding Energy, food, alcohol & tobacco
Everything you need to know about UK Inflation!
But here's the thing about CPI: it's not a perfect measure of inflation. For one thing, it doesn't take into account changes in quality or quantity of goods and services. For example, if you buy a new smartphone that's twice as expensive as your old one, but it has twice as many features, the CPI won't reflect that. Additionally, the basket of goods and services used to calculate the CPI might not be representative of what everyone actually buys. So while the CPI is a useful tool, it's not the whole story.
So, why should we care about inflation and CPI? Well, inflation can have a big impact on our daily lives. If prices are going up faster than our incomes, we might have trouble making ends meet. Additionally, inflation can erode the value of our savings and investments over time. As for CPI, it's an important tool for policymakers to use when making decisions about things like interest rates and government spending.
1.What exactly is inflation?
Inflation is basically the increase in the prices of goods and services over time. You might have noticed that your groceries are more expensive than they used to be, or that your rent has gone up. That's inflation. It's not a new phenomenon, either. Inflation has been around for as long as people have been buying and selling things.2.Why does inflation happen?
There are a lot of factors that contribute to inflation, but one of the main ones is the supply and demand of money. When there's too much money floating around, prices tend to go up. This can happen for a variety of reasons, such as when the government prints too much money or when interest rates are too low. On the other hand, when there's not enough money in circulation, prices tend to go down.3.What is CPI?
CPI stands for Consumer Price Index, which is basically a measure of inflation. The CPI is calculated by looking at the prices of a basket of goods and services that the average person might buy, such as food, housing, and transportation. By tracking the prices of these goods and services over time, economists can get a sense of how much prices are going up or down.But here's the thing about CPI: it's not a perfect measure of inflation. For one thing, it doesn't take into account changes in quality or quantity of goods and services. For example, if you buy a new smartphone that's twice as expensive as your old one, but it has twice as many features, the CPI won't reflect that. Additionally, the basket of goods and services used to calculate the CPI might not be representative of what everyone actually buys. So while the CPI is a useful tool, it's not the whole story.
So, why should we care about inflation and CPI? Well, inflation can have a big impact on our daily lives. If prices are going up faster than our incomes, we might have trouble making ends meet. Additionally, inflation can erode the value of our savings and investments over time. As for CPI, it's an important tool for policymakers to use when making decisions about things like interest rates and government spending.