UK and US inflation compared

UK consumer prices rose 3.1% in the year to Aug 2026, according to the Office for National Statistics, up from 2.9% the month before. The Bank of England aims for 2% on this same CPI measure, so the latest reading is 1.1 points above target, and its next rate decision on 5 Nov 2026 is the first chance for it to respond. The ONS publishes the September 2026 figure on 21 Oct 2026 at 7am and we pick it up the same morning.

The Bureau of Labor Statistics put US CPI inflation at 3.4% for Aug 2026, with core inflation, which leaves out food and energy, at 2.4%. A gap like that tells us food and energy did more of the pushing than the rest of the basket. The September 2026 numbers are out on 14 Oct 2026 at 8:30am New York time, which is 13:30 BST in the UK. One thing that confuses people is that the Federal Reserve's 2% target is measured on a different index, PCE, so the Fed's own inflation figure won't always match this one.

At today's figures an account paying the full Bank Rate of 3.75% would be ahead of 3.1% inflation by about 0.65 points before tax, and that is the best case. Most easy-access accounts pay well below Bank Rate, and interest above your personal savings allowance is taxed, so plenty of savers are losing ground even when the headline real rate looks positive. The savings calculator on our UK inflation page shows what your own balance would be worth in today's money after however many years you choose. Over the past century our research found cash in savings accounts fell a long way behind the growth of the money supply, and that finding is the reason we built this page.

US M2 grew from about $43.7bn in 1926 to about $22,805bn in 2026, roughly 522 times larger, using the annual series behind our Illusion of Wealth research. The latest monthly figure from the Federal Reserve is $23.34tn for Aug 2026. We compare assets with M2 rather than only with CPI because a growing money supply shows up in asset prices such as shares, gold and housing long before it shows up in the price of a weekly shop.

In the UK it is +0.65% at the moment, Bank Rate of 3.75% minus CPI inflation of 3.1%. In the US the Fed funds rate of 3.88% minus CPI of 3.4% gives +0.48%. We show it because it is the quickest test of whether money parked at the policy rate is gaining or losing buying power. When it turns negative, as it did in both countries for long stretches after 2008 and again in 2021 and 2022, holding cash costs you money every year, and that tends to push savers towards shares, property and other assets.