What is inflation?published at 06:19 GMT
Inflation measures how quickly the prices of goods and services are rising.
If the inflation rate is low, then prices are only rising slowly. If the rate is high, you might notice the price of things you buy going up when you shop.
If the rate of inflation falls, that doesn’t mean prices are falling; it means that prices are increasing at a slower rate.
Here’s an example: if a bottle of milk cost £1 in September 2024, but costs £1.05 in September 2025, then the annual inflation rate for milk is 5%.
If the rate was 2%, then the bottle of milk would cost £1.02 – still more than a year ago.
The Office for National Statistics tracks the prices of hundreds of items, from regular supermarket goods and fuel to travel costs and home furnishings.
It uses that “basket of goods” to update the main rate of inflation, the Consumer Prices Index, each month.
