CPI in the UK 2000-2024
The Consumer Price Index of the United Kingdom was 136 in the first quarter of 2025, indicating that consumer prices have increased by 36 percent when compared with the first quarter of 2015. As of March 2025, the inflation rate for the CPI was 2.6 percent, a slight fall from the previous month. A long period of elevated inflation between 2021 and 2023 peaked in October 2022, and saw prices increase by over 20 percent in just three years.
Uptick in inflation expected in 2025
In late 2024, the UK's main economic forecaster; the Office for Budget Responsibility, predicted that the annual inflation rate for 2025 would average out at around 2.6 percent. In March 2025, however, the OBR revised this figure upward, with annual inflation now expected to be 3.2 percent. This uptick in inflation is predicted to peak in the third quarter of the year at 3.7 percent, before falling to two percent by the second quarter of 2026. Although this period of higher inflation is predicted to be far less severe than in 2022, it will no doubt put further pressure on households already struggling with their cost of living.
Cost of living woes continue
The share of UK households reporting that their cost of living was increasing has been steadily rising since Summer 2024. At that time, less than half of UK households reported rising costs, down from 91 percent two years earlier. As of March 2025, however, 59 percent of households said their costs were rising, the highest figure since 2023. Of these households, 93 percent reported that their food shop was increasing, with three quarters of them reporting higher energy costs. With higher inflation predicted in 2025, the pressure on UK households will likely continue, although a crisis on the scale of 2021-2023 will hopefully be avoided.