Topic / economics

Inflation

Prices, purchasing power and the forces changing the cost of living.

Core exam brief

Know the idea before you use the evidence.

Definition

Inflation is a sustained rise in the general price level, reducing the purchasing power of money.

Chain of analysis

Higher aggregate demand or rising production costs can push the price level up; the effect depends on spare capacity and expectations.

Evaluation trigger

Distinguish demand-pull from cost-push inflation and consider whether the change is temporary, broad-based and persistent.

Latest verified coverage

1 Oct 2026 · Japan

Monetary PolicyInflationEconomic Growth

Bank of Japan members see moderate growth but flag inflation upside risks

The Bank of Japan's 1 October 2026 Summary of Opinions says Japan's economy is expected to keep growing moderately, while policymakers continue to watch upside risks to inflation and the case for further policy adjustment.

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30 Sept 2026 · United States

InflationEconomic Growth

U.S. consumer spending rose 0.9% in August as PCE inflation reached 3.4%

U.S. personal consumption expenditures rose 0.9% in August 2026 and real spending increased 0.6%, while the PCE price index was 3.4% higher than a year earlier.

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A shopper using mobile payment at a supermarket checkout

28 Sept 2026 · Japan

Monetary PolicyInflation

Bank of Japan minutes show support for further rate rises if the outlook holds

Minutes from the Bank of Japan's 30–31 July 2026 meeting show members agreed that further policy-rate increases would be appropriate if economic activity and prices develop in line with the Bank's outlook.

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25 Sept 2026 · United States

EnergyCommoditiesInflation

Henry Hub natural gas prices were 6% lower this summer

The Henry Hub natural gas spot price averaged $2.93 per million British thermal units from June to August 2026, 6% below the same period in 2025 despite exceptionally hot weather.

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Map of major natural gas pipelines across the United States

17 Sept 2026 · Eurozone

Inflation

Euro-area annual inflation rose to 3.2% in August 2026

Euro-area annual inflation rose to 3.2% in August 2026, while EU inflation was 3.2%.

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A busy Christmas market in Frankfurt am Main

16 Sept 2026 · United Kingdom

Inflation

UK CPI inflation was 3.1% in the 12 months to August 2026

UK CPI inflation was 3.1% in the 12 months to August 2026, while consumer prices rose 0.5% over the month.

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A shopper placing leafy greens into a supermarket trolley

16 Sept 2026 · United Kingdom

Inflation

UK producer input prices rose 6.1% over the year to August 2026

UK producer input prices rose 6.1% over the year to August 2026, while factory-gate output prices rose 3.7%.

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Researchers discussing additive-manufacturing technology

10 Sept 2026 · China

Inflation

Consumer Price Index in August 2026

China's CPI was 0.8% year on year in August 2026, while consumer prices rose 0.4% month on month.

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Shoppers choosing groceries in a supermarket aisle

10 Sept 2026 · China

Inflation

China producer prices were 3.8% higher year-on-year in August

China's industrial producer prices changed 3.8% year on year in August 2026, while prices changed 0.4% from the previous month.

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1 Sept 2026 · Eurozone

Inflation

Euro-area annual inflation is estimated to have risen to 3.3% in August 2026, from 2.9% in July

Euro-area annual inflation is estimated to have risen to 3.3% in August 2026, from 2.9% in July.

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A shopper placing fresh produce into a supermarket trolley

26 Aug 2026 · United States

Economic GrowthInflation

U.S. GDP growth slowed to 1.5% annualised in Q2 2026

U.S. real GDP grew at a 1.5% annualised rate in the second quarter of 2026, down from 2.1% in Q1, as faster consumer spending was offset by weaker government spending, investment and exports.

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The skyline of downtown Manhattan in New York City

26 Aug 2026 · United Kingdom

Economic GrowthInflation

UK to cut VAT on household electricity from 5% to 0% from October

VAT on household electricity will fall to 0% from 1 October 2026; the government estimates an average household saving of about £45 a year, a 2026-27 cost of around £850 million and a direct 0.10 percentage-point reduction in CPI inflation.

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Electronic electricity meters used to measure household power consumption

21 Aug 2026 · Eurozone

InflationMonetary Policy

Euro-area households lowered near-term inflation expectations

In the ECB's July 2026 Consumer Expectations Survey, median household inflation expectations were 2.9% for the next 12 months, 2.7% three years ahead and 2.4% five years ahead.

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Shoppers at a Christmas market in Frankfurt am Main

19 Aug 2026 · United States

Monetary PolicyInflationLabour Markets

Fed minutes show a 9–3 vote to hold rates at 3.5%–3.75%

Minutes from the Federal Reserve's 28–29 July 2026 meeting show the FOMC maintained its target interest-rate range at 3.5%–3.75% and approved the statement by a 9–3 vote.

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The Federal Reserve Board's Eccles Building in Washington, D.C.

19 Aug 2026 · Eurozone

Inflation

Euro-area annual inflation rose to 2.9% in July 2026

Euro-area annual inflation rose to 2.9% in July 2026, while EU inflation was 3.0%.

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19 Aug 2026 · United Kingdom

InflationMonetary Policy

UK CPI inflation rose to 2.9% in July 2026

UK CPI inflation rose to 2.9% in the 12 months to July 2026 from 2.6% in June, while CPIH inflation increased to 3.1%.

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19 Aug 2026 · United Kingdom

Inflation

UK producer-price inflation eased in July 2026

UK producer input prices were 4.9% higher than a year earlier in July 2026 and factory-gate output prices were 3.1% higher, with both annual rates easing from June.

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The Alexander Dennis chassis factory in Guildford, England

19 Aug 2026 · United Kingdom

InflationInequality

UK private rents rose 3.7% while house-price inflation slowed

Average UK private rent reached £1,393 a month in July 2026, up 3.7% from a year earlier, while the average UK house price was £272,000 in June 2026, up 2.0% on the year.

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Rows of terraced houses in Dorset, United Kingdom

18 Aug 2026 · United Kingdom

Labour MarketsInflation

UK unemployment was 4.9% in April–June 2026

The UK unemployment rate was 4.9% in April–June 2026, while the employment rate was 75.1% and the economic inactivity rate was 20.9%.

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The entrance to Crown House Jobcentre Plus in Chatham, England

17 Aug 2026 · Japan

Economic GrowthInflationMonetary Policy

Bank of Japan forecasts 0.6% growth and 2.5% inflation for FY2026

The Bank of Japan expects real GDP to grow 0.6% and CPI inflation excluding fresh food to be 2.5% in fiscal 2026, while signalling further policy-rate rises as conditions evolve.

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Analysis and example bank

30 July 2026 · Eurozone

15-marker25-marker

Euro-area unemployment held at 6.3% in June 2026

Eurostat reported euro-area unemployment of 6.3% in June 2026 and EU unemployment of 6.0%. Around 11.13 million people were unemployed in the euro area, while youth unemployment was much higher at 14.8%. The release is useful because it combines a relatively low headline unemployment rate with clear evidence that labour-market outcomes differ sharply across groups.

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Jobseekers speaking to employers at a career fair

26 August 2026 · United Kingdom

15-marker25-marker

UK electricity VAT will fall from 5% to 0% from 1 October 2026

The UK government has confirmed that VAT on household electricity will be removed from 1 October 2026. The rate falls from 5% to 0% for the rest of the 2026-27 financial year. The government estimates the change will save households about £45 a year on average, cost around £850 million in 2026-27 and reduce CPI inflation by about 0.10 percentage points. It says the current-year measure is funded through cancellation of the £1.8 billion Digital ID programme.

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The HM Revenue and Customs building seen from Parliament Square in London

11 August 2026 · Global

15-marker25-marker

EIA expects Brent oil to ease from about $85 as supply recovers

The EIA expected Brent crude to average about $85 a barrel in Q3 2026 before easing to around $69 in 2027 as inventories rebuild. This gives students a specific, current supply-shock example rather than a generic statement that oil prices are volatile.

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An offshore oil platform near Santa Barbara, California

13 August 2026 · United Kingdom

15-marker25-marker

UK output per hour rose 0.7% year on year in Q2 2026

ONS’s preferred RTI-based estimate showed UK output per hour 0.7% higher in Q2 2026 than a year earlier and output per worker 1.4% higher. The alternative LFS-based estimate was weaker, making measurement uncertainty a ready-made evaluation point.

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A team on a modern factory floor in Silicon Valley

18 August 2026 · United Kingdom

15-marker25-marker

UK unemployment was 4.9% in April–June 2026

The UK unemployment rate was 4.9% in April–June 2026, with employment at 75.1% and economic inactivity at 20.9%. The release is useful because it connects labour-market conditions to household income, aggregate demand and inflation.

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Workers and machinery in a modern produce facility

26 August 2026 · United States

15-marker25-marker

U.S. GDP growth slows to 1.5% annualised in Q2 2026

U.S. real GDP grew at a 1.5% annualised rate in Q2 2026, down from 2.1% in Q1. Yet private domestic final sales grew 4.2%, making this a strong example of why students should look beyond the headline GDP number.

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Stacked freight containers at a container port

30 July 2026 · United Kingdom

15-marker25-marker

Bank of England holds Bank Rate at 3.75%

The Bank of England kept Bank Rate at 3.75% in July 2026. Three MPC members preferred an increase to 4.0%, showing how policymakers were balancing persistent inflation risks against signs of weaker demand.

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The stone facade of the Bank of England in London

19 August 2026 · United Kingdom

15-marker25-marker

UK CPI inflation rises to 2.9% in July 2026

UK CPI inflation rose to 2.9% in the 12 months to July 2026 from 2.6% in June, while CPIH rose to 3.1%. The release is useful for analysing real incomes, the Bank of England’s policy trade-off and the distinction between headline and underlying inflation.

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A grocery-store worker fulfilling an online order