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Inflation
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UK gilt yields explained: what 2-year and 10-year yields tell youA gilt yield is the market return implied by the price and cash flows of UK government debt. Short and long gilt yields move for different reasons and feed into mortgages, corporate borrowing and equity valuations.UK real wages in 2026: is pay actually beating inflation?UK regular pay grew 0.5% in real terms on the CPIH measure in April to June 2026. Real wages are rising again, but only modestly, and the distinction between nominal and inflation-adjusted pay matters for households and markets.Sterling outlook in 2026: what moves the pound against the dollar and euro?A useful sterling outlook is not a GBP/USD target. It is a framework for relative interest rates, UK growth, inflation, fiscal credibility and external financing. Bank Rate is 3.75% ahead of the 17 September MPC decision.What is the average UK salary, wage and pay?The latest annual ONS survey puts median gross annual earnings for full-time employees at £39,039 in April 2025. By June 2026, regular pay was growing 3.5% a year and real regular pay 0.5%.Are UK interest rates going down in 2026?Bank Rate is 3.75%. The Bank of England held in July 2026 by 6–3, with all three dissenters preferring a rise to 4%. Further cuts are possible, but they are no longer the default direction.UK consumer confidence in 2026: what the data showsGfK consumer confidence rose to -14 in August 2026, its highest reading for two years, from -17 in July and -25 in April. Sentiment is improving, but remains below zero.UK consumer spending in 2026: what the data showsRetail sales volumes rose 1.1% in the three months to July 2026 and 3.0% from a year earlier, despite a 0.5% monthly fall in July. The consumer is recovering unevenly, not collapsing or booming.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.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.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.UK inflation forecast for 2026: where CPI goes nextUK CPI was 2.9% in July 2026, above the Bank of England’s 2% target. The Bank expects energy to push inflation higher again in the near term, while underlying domestic inflation continues to cool.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.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.What is RPI in the UK, and how is it different from CPI?UK RPI inflation was 3.2% in July 2026, compared with CPI at 2.9% and CPIH at 3.1%. RPI is still used in contracts and indexation, but it is not the Bank of England’s inflation target measure.