CPIH in the UK 2000-2024

As of the third quarter of 2024, the CPIH index in the United Kingdom was 133.3 indicating that consumer goods and services had increased in price by 33.3 percent when compared with the baseline year of 2015. In September 2024, the CPIH inflation rate was 2.6 percent, down from 3.1 percent in the previous month. The CPIH index is the consumer price index, which also includes costs related to owning and maintaining a home. The other two main indicators of inflation in the UK are the consumer price index (CPI) and retail price index (RPI), which had rates of 1.7 and 2.7 percent in September 2024, respectively. 

Inflation falls throughout 2023

After reaching a peak of 9.6 percent in October 2022, the CPIH inflation rate fell at the end of that year, and into 2023. Despite this, inflation remained at elevated levels for most of 2023. Although the decline in energy inflation led to a significant fall in prices early in the year, other aspects of inflation, such as food prices remained high for a longer period. Heading into 2024, inflation in the UK is still quite high across many sectors, indicated by the recent high core inflation (inflation excluding food and energy prices) rates reported in 2023. In response to this high inflation, the Bank of England steadily increased its interest rate throughout 2022 and 2023. Although this may have helped put the brakes on inflation, it is possible it worsened the UK's economic prospects last year.

UK economy shrinks in second half of 2023

Since the COVID-19 pandemic, the UK's economic performance has been lackluster. Although the economy bounced back from the initial drop in GDP caused by lockdowns, it has alternated between months of low growth and declines in GDP since 2021. In the last two quarters of 2023, the UK economy shrank by 0.1 percent, and then by 0.3 percent. As a result, the UK economy officially ended 2023 in a technical recession. With the next UK election around the corner, the UK's economic problems will likely be one of the main issues that determines who will form the next government. As of February 2024, the economy is seen as one of the most important issue facing the country by 50 percent of people in Great Britain.