Notes · Topic
Inflation
7 editorial notes from Briefed on Inflation. Thinking from the editorial team, written for UK founders, operators, and investors.
May 2026
What caused the cost of living crisis in the UK?
Three overlapping shocks: energy prices, post-pandemic supply chains, and a wage-price spiral in services. How each one hit, and when costs ease.
May 2026
What is stagflation?
Stagflation is the combination of stagnant economic growth, high inflation, and rising unemployment occurring at the same time. It is unusual because the conditions that drive inflation typically suppress unemployment, and vice versa.
May 2026
What is deflation?
Deflation is a sustained fall in the general price level. Unlike a one-off price drop, deflation means prices across the economy are falling consistently over time. Central banks fear it more than inflation because it is harder to escape and causes severe economic damage once entrenched.
May 2026
UK inflation forecast for 2026: what the predictions say
CPI has fallen from its 11.1% peak towards the 2% target. The consensus sees 2 to 3% through 2026, with services inflation the main upside risk.
May 2026
What is fiscal policy?
Fiscal policy is the use of government spending and taxation to influence economic activity. When the government increases spending or cuts taxes, it stimulates the economy. When it cuts spending or raises taxes, it tightens it. Fiscal policy is distinct from monetary policy, which operates through interest rates.
May 2026
What is monetary policy?
Monetary policy is the use of interest rates, money supply, and other financial tools by a central bank to manage inflation and economic conditions. In the UK, it is set by the Bank of England's Monetary Policy Committee, which meets eight times a year.
May 2026
What is RPI, and how does it differ from CPI?
RPI (Retail Prices Index) and CPI (Consumer Prices Index) are both measures of UK inflation, but they use different methodologies and consistently produce different results. RPI runs around 1 percentage point higher than CPI on average. The difference matters for index-linked contracts, student loans, and regulated prices.