FAQs
In 2024, the annual inflation rate for the United Kingdom is expected to be 2.2 percent, following an annual rate of 7.3 percent in 2023, and 9.1 percent in 2022.
Why is UK inflation falling? ›
Meanwhile, falling inflation was largely due to declining wholesale energy and food prices, along with 14 rate hikes by the Bank of England. UK inflation is now rising at its slowest pace since July 2021. It is also lower than in the eurozone and the US, where rates were 2.6% and 3.3% in May respectively.
How did the UK lower the inflation rate? ›
Lower gas and electricity prices were the main driver behind the sharp inflation drop last month as a lower price cap - which fixes the maximum price that can be charged for each unit of energy - kicked in. Energy prices were 27% lower in April compared to 12 months before, with gas prices alone down 38%.
What is the current UK inflation rate? ›
Prices in the UK rose by 2% in the year to May 2024, down from 2.3% the month before, and the lowest rate in almost three years. It means inflation has finally hit the Bank of England's 2% target.
What is the interest rate forecast for the next 5 years in the UK? ›
The bottom line
Analysts mentioned in this article predicted that the rate may peak at around 4.25% (the current level) before easing in 2024 and falling further into 2025 and 2026.
What is the biggest cause of UK inflation? ›
For example, if there is too much money in the economy, that can lead to more demand for goods and services than there are available, which pushes up on prices and inflation. Recent high inflation in the UK has been driven mainly by 'cost-push' inflation.
Does the UK have the worst inflation? ›
The UK's inflation shock – during which CPI peaked at 11.1 per cent in October 2022, the highest in more than four decades – was the biggest among the G7 economies, and third highest among OECD advanced countries, behind only Sweden and Iceland.
Has UK inflation peaked? ›
Our indicative modelled consumer price inflation estimates suggest that the October 2022 peak was the highest rate in over 40 years (the CPI Accredited Official Statistic series begins in January 1997). The annual rate in April 2024 was the lowest since July 2021, when it was 2.0%.
Is the UK in a recession? ›
The UK economy has bounced back from recession, with stronger-than-expected growth of 0.6 per cent in the first quarter of 2024 – the strongest of all G7 economies.
Will UK interest rates drop in 2024? ›
The mortgage rate forecast for 2024 is that rates are expected to go down, although it may take longer than had previously been hoped.
The inflation rate in Germany, measured as the year-on-year change in the consumer price index (CPI), stood at +2.4% in May 2024. The rate of change was +2.2% in both April and March 2024.
Which country has the highest inflation rate? ›
Top 10 Countries with the Highest Inflation Rates (Trading Economics Jan 2022) With an inflation rate that has soared above one million percent in recent years, Venezuela has the highest inflation rate in the world.
Is UK inflation improving? ›
UK inflation has eased to 2% - increasing the prospect of an interest rate cut within months. The consumer prices index (CPI) rate for the year to May was confirmed by the Office for National Statistics (ONS) on Wednesday. The figure indicates that prices are still rising, but at the slowest pace since July 2021.
What is the current UK inflation rate in 2024? ›
The UK inflation rate was two percent in May 2024, the lowest inflation rate in the country since April 2021. Between September 2022 and March 2023, the UK experienced seven months of double-digit inflation, which peaked at 11.1 percent in October 2022.
What is the expected inflation rate for 2024? ›
On the basis of these inflation forecasts, average consumer price inflation should be 3.1% in 2024 and 2.0% in 2025, compared to 4.06% in 2023 and 9.59% in 2022.
What is the Bank of England inflation expectations for 2024? ›
Twelve-month CPI inflation remains above the MPC's 2% target, but it declined to 3½% in 2024 Q1, broadly in line with expectations in the February Report. Inflation is projected to return to close to the target throughout the second quarter of this year, before increasing slightly in Q3 and Q4, to around 2½%.
What will the interest rate be in the UK in 2024? ›
The latest forecasts are for UK interest rates to start to go down from September 2024, where financial markets are pricing in around 2 cuts to the UK Interest Rate from 5.25% at the start of 2024 to 4.75% by the end of 2024.