Home Guides & News About Us Contact
Live ONS data · Updated monthly

The Real Cost of Living

Official UK inflation measures - CPI, CPIH, and RPI - alongside real wages. What the headline number doesn't always tell you, and why it matters for your clients.

CPI · Jun 2026
2.6%
Consumer Price Index · 12-month rate
CPIH · Jun 2026
2.8%
Incl. housing costs · 12-month rate
RPI · Jun 2026
3.0%
Retail Price Index · 12-month rate
AWE · May 2026
£749
Avg weekly earnings · gross, total pay

UK Inflation: 2000 to today

Annual rates for CPI, CPIH, and RPI - the three main official measures. Each captures slightly different aspects of price change. Hover to inspect individual months.

CPI CPIH RPI (yr/yr)

2% Bank of England target

2008–09Financial crisis · RPI briefly negative
2011–12VAT rise + commodity spike · CPI peaks 5.2%
2015–16Oil price collapse · near-zero CPI
2021–23Energy shock · CPI peaks 11.1% Oct 2022
2024–26Disinflation · CPI returns toward target

Are wages keeping up with prices?

Average Weekly Earnings from ONS - nominal (what's paid) and real (adjusted for inflation). The gap between the two lines is the purchasing-power squeeze.

£749
Avg weekly pay (gross, total) · May 2026
↑ 37% vs pre-pandemic
108.3
ONS real-terms index (regular pay, CPIH-adjusted) · May 2026
↑ 4.4% real vs pre-pandemic
£547
Avg weekly pay (gross, total) · Feb 2020
Pre-pandemic baseline
Reading this chart: Both lines start at 100 at the beginning of whichever time window you select, so they are always directly comparable. The teal line tracks nominal pay (what appears in payslips); the dashed orange line tracks real purchasing power after adjusting for the selected inflation measure. The shaded gap is the cumulative inflation cost over the selected period - hover for details. A narrowing gap means workers are recovering lost ground; a widening gap means inflation is outrunning pay.
Deflated by:
Sector:
Nominal pay (indexed to period start) Real pay, deflated by selected measure (indexed) Purchasing power gap
Source: ONS Average Weekly Earnings, total pay (seasonally adjusted): whole economy (KAB9), private sector (KAC4), public sector (KAC7). Real series computed by deflating the selected sector against CPI (D7BT), CPIH (L522), or RPI (CHAW) price indices, each normalised to Jan 2015 = 100. Read the full methodology →

Inflation vs pay growth, year on year

The same story as a rate race: annual price inflation (CPI, CPIH, RPI) against the annual growth in nominal pay. When a price line sits above the pay line, inflation is outrunning wages; when pay is on top, real earnings are recovering. Click a legend label to show or hide a series.

Source: ONS CPI (D7G7), CPIH (L55O), RPI (CHAW) annual rates, and Average Weekly Earnings whole-economy total pay (KAB9) shown as the year-on-year change. Pay growth here is nominal - compare it against any inflation line to read the real-terms effect.

How inflation hits different households

The headline rate is an average. The ONS Household Costs Indices measure inflation as different households actually pay it - and unlike CPI, they include mortgage interest. Pick a view to see how each group's rate has moved against headline CPI.

Why these differ from CPI: the HCI use a payments approach - they count mortgage interest, council tax and student-loan repayments that CPI leaves out. That is why a mortgaged household's rate can sit well above the headline when interest rates rise. And the lead changes hands over the cycle: the 2022 energy shock hit lower-income and retired households hardest (retired peaked at 14.3% in October 2022, above mortgaged owners on 12.7%); the 2023-24 rate phase then pushed mortgaged owners to the top (7.9% in October 2023); and as landlords repriced their leases, renters took the lead (social renters 4.6% in June 2025). By March 2026 all four tenure groups had converged near 3.6-3.7%. Series shown from January 2022, the span published in this HCI table.
Compare by:
Retirement planning? Choose Retirement above to compare a retired household's inflation with a working one - the rate you assume drives every long-horizon projection. See the State Pension top-up and pension lump sum calculators.
Source: ONS Household Costs Indices for UK household groups (reference tables), 12-month percentage change, payments approach. Official statistics in development. ONS HCI bulletin →

Your personal inflation rate

The headline rate prices an average basket that no real household buys. This calculator weights each official CPI category by what you spend, giving the inflation rate for your basket - now, and back through time. It uses the same method and the same data as the ONS's own calculator (Living Costs & Food Survey expenditure weights against official price indices) with fresher weights - and a history view no other UK tool offers.

-
Your basket's 12-month inflation rate
-
Headline CPI over the same 12 months
-
What the same basket cost a year ago vs now

History holds your current weights constant - it answers "what would my current basket's inflation have been", not "what was I spending then".

Each bar is that category's weight in your basket multiplied by its current 12-month price change - together they sum to your personal rate.

Show the data & method
  • Method. Your spending across the 12 CPI divisions sets the weights; each division's official 12-month price change (ONS MM23, updated with each release) is weighted by your share. This is the same expenditure-weights approach the ONS uses in its own personal inflation calculator.
  • Weights vintage. Profile pre-fills come from the ONS Living Costs & Food Survey, financial year ending March 2024 - the latest published. The vintage is shown so you can judge freshness; spending surveys lag by design.
  • What sits outside the CPI basket. Mortgage interest, council tax and other non-consumption costs (the LCF's "other expenditure" category - typically 11-18% of total spend) are not in CPI, so they are excluded and your weights renormalised. For the payments-based view that does include mortgage interest, see how inflation hits different households above.
  • Profiles are single-dimension. The published LCF tables don't cross tenure with income with region, so each profile is one dimension (a real published column, not a modelled blend). Pick whichever dimension fits you best, then adjust the figures to your actual spending.
  • Why the UK-average default doesn't exactly match headline CPI. CPI weights come from national accounts; these pre-fills come from the household survey (and exclude the non-CPI category) - so even the average basket here can sit a couple of tenths off the headline rate. That gap is a feature of measuring honestly, not an error.
  • Small print. Health and education spending is suppressed in some published profiles (small samples) - UK-average values are substituted and marked with a dotted underline (typically around 1% of spend each). Regional profiles are 3-year pooled averages. Income-decile profiles use gross income deciles - a different basis from the equivalised-disposable deciles in the household section above.

What the measures mean - and when each one matters

CPI, CPIH, and RPI all measure inflation, but they answer slightly different questions. Which one applies depends on your client's situation.

CPI

Consumer Price Index

The headline measure used by the Bank of England to set interest rates. Covers a basket of goods and services but excludes housing costs (mortgage interest, council tax). The 2% inflation target refers to CPI.

Used for: BoE monetary policy, many index-linked contracts, state benefits uprating (from 2011).

CPIH

Consumer Prices Index incl. Housing

CPI extended with owner-occupiers' housing costs using rental equivalence. ONS's preferred measure since 2017. Generally runs slightly above CPI.

Used for: ONS preferred headline, broader cost-of-living analysis, Scottish Government comparisons.

RPI

Retail Price Index

The oldest measure. Uses a different formula (arithmetic vs geometric mean) whose construction alone pushes it roughly 1pp above CPI over the long run - though the gap in any given month moves with mortgage rates and housing costs, and can be far smaller (compare the live cards above). No longer a National Statistic but still widely used in practice.

Still used for: student loan interest, rail fares, index-linked gilt coupons, some DB pension uprating - making it highly relevant to advisers.

Related guides: How to calculate your personal inflation rate - the method behind this section, with a worked example. Has your pay kept up with inflation? - which measure to use for your own salary and how to check whether a pay rise is really a real-terms cut.

Methodology transparency: All data sourced from ONS under the Open Government Licence v3.0. UKFT does not modify the published series. The full methodology document explains data sources, update cadence, and the limits of each measure. Version 1.0, May 2026.

Data: ONS (OGL v3.0) · Data to Jun 2026 · This tool presents publicly available data. It is not financial advice.