Current UK Inflation Rate – Falls to 2.8% in April 2026

The latest official data from the Office for National Statistics (ONS) shows that the UK inflation rate, as measured by the Consumer Prices Index (CPI), stood at 2.8% in the 12 months to April 2026. This represents a notable decline from 3.3% in March 2026 and marks the lowest reading since September 2024. The broader CPIH measure, which includes owner occupiers’ housing costs, registered 3.0%, while the older Retail Prices Index (RPI) came in at 4.1%.

Although the April figure signals a clear downward trend, inflation remains above the Bank of England’s 2% target for the 30th consecutive month. The drop was driven largely by lower energy costs following the April price cap reduction, while food price inflation eased to 1.2% and services inflation edged down from 5.1% to 4.8%. The data will be closely watched by the Monetary Policy Committee ahead of its next meeting on 18 June 2026.

This article provides a comprehensive snapshot of the current UK inflation rate, compares the main inflation measures, explains why prices are still rising, and examines what the outlook means for mortgages, savings, and the broader economy.

What is the current UK inflation rate (April 2026)?

• Inflation fell from 3.3% in March to 2.8% in April 2026, the largest monthly drop in over a year.
• Despite the decline, inflation remains above the Bank of England’s 2% target for the 30th consecutive month.
• Core inflation (excluding energy and food) remains sticky around 3.5%, driven by services and wage growth.
• Markets now price in a potential Bank Rate cut in Q3 2026 if inflation continues to trend downward.

Source: ONS Inflation and Price Indices. RPI is no longer a national statistic but is used for some contracts.

Why is UK inflation still above the Bank of England’s 2% target?

The headline rate has fallen sharply from its October 2022 peak of 11.1%, but at 2.8% it remains 0.8 percentage points above the Bank’s target. Several structural factors explain why inflation has not yet returned to 2%.

Energy and food price contributions

The April 2026 drop was primarily driven by lower energy costs after the latest price cap adjustment. Food price inflation has eased to 1.2%, down from double-digit levels in 2023. However, regulated utility prices and volatile global energy markets continue to exert upward pressure. The Bank of England Inflation and the 2% Target page notes that these external factors can create short-term volatility even when domestic price pressures are moderating.

Core inflation and services inflation

Core CPI, which strips out energy, food, alcohol and tobacco, stood at 3.5% in April 2026, down from 3.8% in March. Services inflation remains the most stubborn component at 4.8%, driven by wage growth in the hospitality, retail and care sectors. The ONS reported that CPIH services inflation was 4.3% in March, illustrating how labour costs continue to feed through to consumer prices.

Bank of England monetary policy response

The Bank of England has held the Bank Rate at 3.75% since the last cut, waiting for clearer evidence that inflation is sustainably returning to target. The MPC has signalled that a rate cut could be appropriate if inflation continues to surprise on the downside, but wage growth at 5.5% (three-month average) may keep services inflation sticky for longer.

What is the Bank of England inflation forecast for 2026?

Official Bank of England projections

The Bank of England’s latest forecasts indicate that CPI inflation is expected to remain close to 2% over the policy horizon, assuming interest rates follow market expectations. The Monetary Policy Report, updated quarterly, projects that inflation will fall further through 2026 and into 2027, though the timing depends heavily on domestic wage dynamics and global energy prices.

Market expectations and bond yield signals

Market pricing suggests a potential Bank Rate cut in Q3 2026 if the downward trend in inflation continues. The UK 30-year bond yield, which reflects long-term inflation expectations, has moderated in recent months, indicating that investors broadly expect inflation to settle near target. Trading Economics projects UK inflation at 2.5% in 2027 and 2.0% in 2028, in line with the Office for Budget Responsibility’s view that inflation will fall rapidly from 2026 onward as energy effects drop out and spare capacity increases. More detail can be found on the Trading Economics – UK Inflation Rate page.

Risks to the forecast

The OBR notes that CPIH and RPI are expected to be around 2.4% beyond the forecast horizon, implying an ongoing RPI-CPI wedge of about 0.4 percentage points. Upside risks include geopolitical shocks to energy supply, higher-than-expected wage settlements, and persistent services inflation. Downside risks include a sharper-than-expected slowdown in consumer demand and a rapid fall in global commodity prices.

How does UK inflation affect mortgages and household finances?

Mortgage interest rate trends

Inflation directly influences mortgage costs through the Bank of England’s Bank Rate. When inflation stays above target, the Bank tends to keep rates higher for longer, pushing up tracker and variable-rate mortgage payments. New fixed-rate pricing also reflects the market’s view of future rate moves. As inflation eases, expectations of rate cuts rise, which can reduce mortgage pricing pressure. According to the BBC News – UK Inflation Analysis, the drop from 3.3% to 2.8% has already led to some improvement in swap rates, which underpin fixed-rate mortgage offers.

Savings and real returns

With CPI at 2.8%, savers need to earn at least that rate on their deposits to maintain purchasing power. Many savings accounts currently offer rates below 3%, meaning real returns are negative for those paying basic-rate tax. If inflation continues to fall, the gap between savings rates and inflation should narrow, gradually improving real returns for households.

Impact on cost of living and household budgets

Higher inflation squeezes household budgets even when wages are rising. The UK unemployment rate remains historically low at 4.2% (February–April 2026), and GDP grew by 0.4% in Q1 2026, but real wage growth has only recently turned positive after two years of above-target inflation. The YCharts – UK Inflation Rate History data shows that the long-term average CPI rate of 2.84% over the past decade means the current reading is slightly below the historical norm, offering some relief.

What is the difference between CPI, CPIH and RPI?

Definition and coverage of each index

CPI (Consumer Prices Index) is the main UK inflation measure and the one used by the Bank of England for its 2% target. It does not include owner occupiers’ housing costs. CPIH extends CPI by adding owner occupiers’ housing costs and council tax, making it the most comprehensive measure according to the ONS. RPI (Retail Prices Index) is an older measure that includes some housing-related costs but is no longer classified as a national statistic. The ONS considers CPIH the preferred headline measure, but the Bank’s target remains CPI.

Why CPIH is the preferred measure

The ONS regards CPIH as the most complete indicator of UK inflation because it captures the cost of owning and maintaining a home, which is a significant expense for most households. When housing costs rise strongly, CPIH tends to be higher than CPI. In April 2026, CPIH stood at 3.0%, slightly above the CPI reading of 2.8%.

Historical averages (10-year and 5-year)

Over the ten years from 2016 to 2026, the average CPI rate was 2.84%, CPIH averaged 2.9%, and RPI averaged 3.5%. The current CPI reading of 2.8% is almost exactly in line with the decadal average, suggesting that after the spike of 2022–2023, inflation has returned to a more normal range, albeit still above the 2% target.

Key UK inflation milestones (2023–2026)

1. October 2022: CPI peaks at 11.1% – the highest rate in 40 years, driven by energy and supply shock after Russia’s invasion of Ukraine.
2. 2023: Inflation gradually falls from 10% to 4% amid energy price cap changes and easing supply chain pressures.
3. May 2024: CPI falls to 2.0% – the first time at the Bank of England’s target in nearly three years.
4. Late 2024: Inflation rebounds to around 3.5% due to base effects, wage growth, and residual energy price adjustments.
5. April 2026: CPI drops to 2.8% – the lowest since September 2024, but still above the 2% target.

What is certain and uncertain about the inflation outlook?

While the headline number is precise, future projections involve assumptions about global commodity prices, domestic demand, and monetary policy lags.

Why inflation is falling and what it means for the economy

The drop from 3.3% to 2.8% was driven by lower energy costs following the April price cap reduction, which directly reduced household utility bills. Food price inflation eased to 1.2%, while services inflation edged down from 5.1% to 4.8%, reflecting some moderation in wage pass-through. The Bank of England has signalled that a rate cut could be appropriate if inflation continues to surprise on the downside. However, wage growth remains at 5.5% (three-month average), which could keep services inflation sticky.

Compared to other major economies, UK inflation at 2.8% sits between the US (3.5%) and the Eurozone (2.4%). All three have fallen sharply from their 2022 peaks but remain above their respective central bank targets. The UK economy grew 0.4% in Q1 2026 and is not in recession, though high inflation has squeezed household spending power. The unemployment rate of 4.2% remains historically low, suggesting the labour market has absorbed the inflation shock without significant job losses. For further context on fiscal and economic policy, the Chancellor of the Exchequer – UK’s Chief Finance Minister page provides background on the government’s role in managing the economic environment.

Looking ahead, if inflation continues to fall below 2.5%, the Bank may cut rates by 0.25% at the June or August 2026 meeting. Services inflation will be the key watchpoint, as it reflects domestic wage and demand pressures that are less influenced by global energy prices.

What do official sources say about the current inflation rate?

“The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 3.0% in the 12 months to April 2026, down from 3.4% in March.”

— Office for National Statistics

“The Government sets us a 2% inflation target. Current inflation rate 3.3% (March) – now 2.8% (April).”

— Bank of England

“Prices in the UK rose by 2.8% in the year to April, down from the 3.3% recorded in March, but still above the Bank of England’s 2% target.”

— BBC News

These official and widely cited sources all confirm the same direction of travel: inflation is easing, but the journey back to 2% is not yet complete. For further information on how inflation interacts with social security policy, see the UK State Pension Increase Campaign – Petitions and 2026 Rise page.

What happens next for UK inflation?

If inflation continues to fall below 2.5%, the Bank may cut rates by 0.25% at the June or August 2026 meeting. Services inflation will be the key watchpoint. The next ONS inflation release (for May 2026) is due on 17 June 2026, followed by the Bank of England Monetary Policy Committee meeting on 18 June 2026. The Bank’s Quarterly Monetary Policy Report in August 2026 will provide updated forecasts. The broad consensus among official forecasters is that inflation will drift lower through 2026 and beyond, gradually returning to the 2% target as energy effects fade and spare capacity increases.

Frequently asked questions about UK inflation