PolicyEngine Macro
CPI INFLATION
2.8%
percent, year-on-year
- Observation
- 2026Q2
- Vintage
- 2026-07-26
- Source
- ONS · D7G7
UK topic · prices
Where are prices now, and where does the model put them?
CPI is 2.8% in 2026Q2 and core 2.6% in 2026-06; the model's median does not reach 3% again until 2027Q2.
01 — where it stands
The numbers, as the snapshot stores them.
CORE CPI INFLATION
2.6%
percent, year-on-year
- Observation
- 2026-06
- Vintage
- 2026-07-26
- Source
- ONS · DKO8
Both series are published by the ONS as year-on-year rates, so the values above are the published rates themselves, not a transformation applied here.
How those readings have moved, derived from the same stored observations rather than typed in: CPI inflation -0.3pp against the prior quarter (2026Q1); Core CPI inflation +0.0pp against the prior month (2026-05).
02 — what the models see
The model view, and the same breath its limits.
boe-svar — the Bank of England structural VAR replication — forecasts headline CPI. The round generated 2026-07-29 puts the first open quarter, 2026Q3, at 2.5% with a 68% range of 1.8%–3.3%. Its median does not return to 3% until 2027Q2. And in the same breath:
- Status: validated replication for selected outputs.
- It cannot answer statutory policy reform effects.
- It forecasts headline CPI only. Core CPI is shown above as an outturn; no model in this suite forecasts it.
- Uncertainty is posterior 68% and 90% intervals; the sample ends 2025Q1 while the conditioning data run to 2026Q1.
| Quarter | Median | 68% | 90% |
|---|---|---|---|
| 2026Q2 | 2.64% | 2.22%–3.09% | 1.94%–3.34% |
| 2026Q3 | 2.54% | 1.83%–3.29% | 1.40%–3.85% |
| 2026Q4 | 2.94% | 1.97%–3.97% | 1.38%–4.74% |
| 2027Q1 | 2.97% | 1.74%–4.20% | 0.90%–5.11% |
| 2027Q2 | 3.06% | 1.72%–4.28% | 0.80%–5.19% |
Predictive validation: weak. Against a no-change random walk the model looked strong on CPI (0.63 at h=1), but a driftless walk on a trending log level is too weak a benchmark: against a random walk WITH DRIFT the CPI ratio becomes 0.83 at h=1 and 1.03 at h=8, i.e. no better than naive. Bank Rate is the one series that improves under the harder benchmark (0.79 at h=1, p=0.018) and is the defensible forecasting claim. UK GDP is not distinguishable from either benchmark (p=0.38-0.67), and excluding six Covid-target origins its ratio falls to 0.77. The frozen-edge run gives 0.32pp RMSE from a single origin. Read the validation page →
03 — run it yourself
Every number above is a command away.
The CPI path above comes from the same command as the growth forecast. A second command carries it into household incomes: it scales the statutorily CPI-uprated benefit parameters by the model-versus-reference gap and scores that as a real reform.
pe-macro forecast --horizons 8 # GDP and CPI, medians with 68% and 90% bands
pe-macro svar-inflation-incidence --year 2027 --reference obr # who bears the CPI gap, by decileOver MCP: forecast_uk for the path and svar_inflation_incidence for the uprating incidence. The incidence run excludes the triple lock and frozen thresholds, and says so in its own caveats. Connect a client →
04 — the data behind it
Source, coverage, and the immutable file.
| Series | Publisher | Coverage | Snapshots | This vintage | Next release |
|---|---|---|---|---|---|
| CPI inflation | ONS · D7G7 | 1989Q1 – 2026Q2 | 2 | 2026-07-26.json | 19 August 2026 |
| Core CPI inflation | ONS · DKO8 | 1989-01 – 2026-06 | 1 | 2026-07-26.json | 19 August 2026 |
Headline CPI is stored quarterly and core CPI monthly, so the two observation periods above do not line up — that is the data, not a presentation choice.
The snapshot files are append-only and never edited, so a number published here can be reproduced against the data as it stood — browse the store, its release calendar, and the as-of recipe →