The UK has recorded its lowest level of inflation since 2020, marking a significant milestone after several turbulent years of cost-of-living pressures. According to the Office for National Statistics (ONS), both headline and core inflation have eased more rapidly than expected, driven largely by stabilising energy prices and slowing food cost growth.
Energy bills, which were one of the main drivers of inflation from 2021 to 2024, have levelled off following increased renewable production, improved grid efficiency, and government support schemes. Households across England, Scotland, and Wales are reporting slightly more predictable monthly expenses, offering some relief after years of volatility.
Food inflation has also cooled, though prices remain higher than before the pandemic. Retail analysts note that supermarket competition—particularly among Tesco, Sainsbury’s, and Aldi—has helped stabilise prices for essential goods such as bread, milk, eggs, and fresh vegetables.
Transport costs remain mixed. Rail fares are still rising, but petrol prices have decreased compared with last year due to global supply improvements.
Housing costs, however, continue to put pressure on renters, especially in cities like London, Bristol, and Edinburgh, where demand far outstrips supply.
Economists warn that although inflation is falling, the cost-of-living crisis is not over. Many households are still struggling with accumulated debt, high rents, and stagnant wage growth. But the latest inflation figures signal the clearest improvement in years, offering cautious optimism for the remainder of 2026.