What is happening to UK prices?

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1. 1

   What is happening to UK prices?

   BBC NewsPublished Oct 21, 2026Checked Oct 21, 2026

   “Inflation in the UK rose to 3.5% in the year to September, the highest rate in nearly a year and above the Bank of England's 2% target. The rise was slightly higher than economists had predicted, driven by higher petrol and diesel prices. Inflation is widely expected to rise again in the coming months. Inflation is the increase in the price of something over time. For example, if a bottle of milk costs £1 but is £1.05 a year later, then annual milk inflation is 5%. The prices of hundreds of everyday items, including food and fuel, are tracked by the Office for National Statistics (ONS). This virtual "basket of goods" is regularly updated to reflect shopping trends, with alcohol-free beer, dashboard cameras, and pet grooming equipment among items added in 2026 , while premium bottled lager and sheets of wrapping paper were removed. The ONS uses price changes in the basket of goods over the previous 12 months to calculate inflation. The main inflation measure is called the Consumer Prices Index (CPI) , external , and the latest figure is published every month. The Bank of England looks closely at the inflation figures when deciding whether to increase, lower or hold its base interest rate, which is currently 3.75%. Putting rates up makes borrowing more expensive, giving people and businesses less money to spend, reducing demand for goods and slowing price rises. But it is a careful balancing act – increasing borrowing costs also risks harming the economy.”

2. 2

   Do petrol prices rise faster than they fall? Evidence from the UK retail and wholesale petrol sectors

   The Journal of Economic Asymmetries (Amountzias)Published Aug 15, 2023Checked Oct 21, 2026

   “This study investigates the presence of price asymmetries in the UK retail and wholesale petrol sectors over the period of January 2020–July 2022. The scope of this research is to explore whether petrol prices rise faster than they fall according to changes in input costs, namely fuel and international crude oil prices for the retail and wholesale sector respectively. As the time sample considers the shocks of covid-19 restrictions and rising inflation, the presence of structural breaks is assumed which may contribute to asymmetric behaviour. The Autoregressive Distributive Lag (ARDL) approach is implemented in the pricing equation of the model by formulating four versions for each sector, according to the presence of asymmetries and price-cost margins. The results provide significant evidence of price asymmetries in the retail petrol sector; however, such asymmetries are less pronounced over high margin periods. The wholesale sector is found to be more flexible to changes in crude oil prices as asymmetries are less persistent throughout the sample. Therefore, consumers face rigid petrol prices because of retail firms’ decisions, which should be the focus of policy makers.”

3. 3

   Inflation effects of oil and gas prices in the UK: Symmetries and asymmetries

   Utilities Policy (Abubakar et al.)Published Jul 27, 2024Checked Oct 21, 2026

   “The United Kingdom is among the countries experiencing a cost-of-living crisis believed to be influenced, at least in part, by the dynamics of the international oil and gas markets. To this end, this study aims to achieve to achieve two objectives. Firstly, the dynamic association between the UK's inflation and oil and gas prices is examined. Further, the study examines whether the response of the UK's inflation to energy price dynamics is (a)symmetric. This study adopts wavelet coherency to determine the dynamic co-movement between energy prices and inflation. In addition, the dynamic simulated autoregressive distributed lag model (DS-ARDL) is used to examine the dynamic response of inflation to energy price changes. The estimation results reveal a symmetric response of inflation to gas price shocks. Further, the response of inflation to oil price shocks is asymmetric. Interestingly, the effect of gas price dynamics passes more strongly to inflation than to oil price dynamics. These findings suggest that a more diversified energy mix could help prevent substantial energy price pass-through to inflationary pressures.”

4. 4

   The Rise and Rise of Inflation

   Significance (O'Neill et al.)Published Apr 1, 2018Checked Oct 21, 2026

   “Where did our current measures of consumer price inflation come from? Who made the important changes that led to the sophisticated methodology we use today, and when were those changes made? Rob O'Neill, Jeff Ralph and Paul Smith explore the history of one of our most important economic indicators”

5. 5

   The role of inflation in the UK economy in the post-pandemic era

   Contemporary Europe (Podkolzina)Published Apr 15, 2023Checked Oct 21, 2026

   “Based on the analysis of the economic literature, speeches given by the central bank’s staff, official documents and statistical data the author discusses the implicit transition in the regulation approaches used by HM Treasury and the Bank of England. There is some evidence that the cost-of-living crisis as a part of the inflation problem gets a top priority in the post-pandemic era. The government addresses this issue mainly through the income redistribution and benefits and financial support for lower income households. With regard to the inflation problem per se, the official approach implies the shift from monetary to fiscal tools. It means the expanding use of automatic stabilizers through increasing taxes and NICs in accordance with the IMF recommendations. Meanwhile, the Bank of England’s measures are more consistent with the task of financing the government’s borrowing than maintaining the price stability. These findings highlight the rising role of the state in the UK economy. The paper concludes with some comments regarding the split within the conservative party over the marked shifts in the monetary and fiscal policy.”