Inflation tracker

A visualisation of the latest UK Consumer Price Index (CPI) data with expert commentary from key PwC leaders. 

UK Inflation Tracker

Using the UK Office of National Statistics data for the Consumer Price Index, we have visualised some of the most common categories in order to understand the market trends in inflation. The data is updated monthly as new data is released.

Last updated: 14 February 2024

PwC expert commentary

Economics

The disinflationary process has stalled in the UK, with inflation flatlining at 4.0% in January following December’s higher-than-expected inflation reading. However, inflation still came in marginally below the Bank of England’s expectation of a rise to 4.1%.

Despite inflation flatlining, consumer prices actually declined relative to December 2023, as is typical for January. However, this downward pressure on inflation was counteracted by the rise in the household energy price cap, combined with base effects due to weak price rises a year earlier.

Our modelling indicates that the disinflation process will resume in February, with momentum really picking up in April as there is a double digit cut to the household energy price cap. As a result, our modelling indicates that we are still on track for inflation to fall to the 2% target in April, before picking up slightly in the second half of the year.

Jake Finney, economist at PwC

Consumer markets

The Consumer Prices Index (CPI) rose by 4.0% in the 12 months to January 2024, the same rate as in December 2023.  

While there will be some disappointment that inflation has not continued the rapid declines we saw in the second half of last year, there is still much to cheer for consumers.

Most retail product categories saw inflation ease, most notably food, which continued to fall, despite January not benefitting from seasonal promotions by supermarkets in the run-up to Christmas. Meanwhile fashion and other general merchandise categories saw inflation ease thanks to widespread discounting to clear excess seasonal stock.

The biggest decline in inflation was in furniture and household goods, a category that has seen the biggest hit from the cost of living crisis and has been ramping up promotions to entice consumers to shop.

But with consumer spending still squeezed, lower inflation has not, as yet, translated into stronger retail sales with January sales being disappointing for many despite a higher level of discounting than prior year. Did the “grey” weather and potential Christmas credit hangover subdue sales?  Will events such as Valentine’s Day bring some cheer back and boost spending?

Where consumers are spending more is on prioritising experiences, and in particular booking holidays, as is traditional in the new year.  And they will have been harder hit by continued inflation in categories such as air travel and no let up in hotel and restaurant inflation.

Despite January’s blip, the overall direction of travel continues to be down, and inflation could well still meet the Bank of England target in the first half of this year. Together with forecast real wage growth and likely interest rate cuts, consumer-facing businesses will be hoping that consumer demand rebounds as the economic backdrop brightens, even if we don’t expect a meaningful consumer recovery until the second half of 2024.

Lisa Hooker, Leader of Industry for Consumer Markets

Contact us

Barret Kupelian

Barret Kupelian

UK Chief Economist, PwC United Kingdom

Tel: +44 (0)7711 562331

Gemma-Louise Bond

Corporate Affairs Manager - Retail, consumer and leisure, PwC United Kingdom

Tel: +44 (0)7483 147794

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