Welcome to the Money blog, Sky News’ consumer and personal finance hub. Today, all the latest as a new inflation figure is announced – including which prices are rising.
Wednesday 17 September 2025 08:15, UK
Sky News has launched a free Money newsletter, bringing the kind of content you enjoy here in the Money blog directly to your inbox.
Each Friday, subscribers get exclusive money-saving tips and features from the team behind our award-winning blog, which is read by millions of people every month.
Sign up today, and this week you’ll find the following in the newsletter:
We also outline the best deals available in five key areas for your household budget, including mortgages, savings rates and bank switch deals. 
So join our growing Money community – and thanks to the thousands of you who already have.
The government has been urged to “turn the tide” in rising food prices to stop households from “feeling the pinch” in their food shop. 
The latest data shows that food inflation has climbed about 5% for the first time in 18 months, hitting 5.1% in August. 
Vegetables, cheese and fish items were some of the products that increased in price, while the cost of some key staples such as cereals and pasta fell. 
The British Retail Consortium has blamed the rising prices on changes made by the government, including increased employer national insurance contributions, a higher national living wage and a new packaging tax. 
“Households across the country are noticing the increasing cost of their weekly shop. Retailers are doing everything they can to deliver great value for their customers, but are unable to absorb the £7bn in costs they have been landed with this year,” said the body’s director of insight, Dr Kris Hamer. 
“The chancellor can help turn the tide at the budget by delivering a meaningful business rates reduction, with no shop paying more as a result. 
“If the government instead chooses to burden the industry with more costs, then it will be households who feel the pinch as they go about their weekly shop.” 
Government blames global factors
Rachel Reeves is due to deliver her autumn budget on 26 November. 
Treasury chief secretary James Murray denied that government policies were behind increased supermarket prices, instead blaming global market pressures.
“We know that a key factor in terms of food prices is global commodity prices and that’s why it’s so important that we’ve struck the three trade deals which we have, because those trade deals not only help with jobs and investment in the UK but they also help to bring down the cost of things at the supermarket checkout,” he told reporters. 
Reacting to today’s inflation figures, Rachel Reeves said: “I know families are finding it tough and that for many the economy feels stuck. 
“That’s why I’m determined to bring costs down and support people who are facing higher bills.” 
The chancellor said the government was making changes to “put more money in people’s pockets” and build a “stronger, more stable economy that rewards hard work”. 
Shadow chancellor Mel Stride said the government was failing to control inflation, which remains well above the Bank of England’s 2% target.
“This morning’s news that inflation remains well above target is deeply worrying for families. This is the 11th consecutive month inflation has exceeded the 2% target,” he said. 
“Labour’s decision to tax jobs and ramp up borrowing is pushing up costs and stoking inflation – making everyday essentials more expensive.”
Food inflation has risen for the fifth month in a row and climbed above 5% for the first time in 18 months, today’s Office for National Statistics data shows. 
The price of food has surged 5.1% in the year to August, up from 4.9% in July. 
This means that a food shop that cost £100 last year will now set you back around £105. 
ONS chief economist Grant Fitzner said small increases were seen across a range of vegetables, cheese and fish items. 
However, food inflation is still well below the peak seen in early 2023 when it hit 19.1% – its fastest pace for over 40 years.
Leading industry body, The Food and Drink Federation, recently warned that it could rise to 5.7% by the end of the year. 
The group – whose members make a quarter of all food and drink sold in the UK – said current food prices were “steeper than anything in recent decades”.
You can read more about its predictions below…
The price of airfares pulled down inflation last month, with costs rising less than a year ago, the official data from the Office for National Statistics shows. 
But the impact was overshadowed by a rise at the petrol pump and the cost of booking a hotel, which pushed inflation upwards. 
Food prices have also continued to stay stubbornly high. 
On a monthly basis, food and non-alcoholic beverages prices rose by 0.2% in August. 
The UK continues to have the highest inflation rate among the G7.
The US, Canada, France, Italy and Germany all recorded inflation rates lower than 3.8% in August. 
We are still waiting for Japan’s latest data, which is why it’s not included in the table below, but in July, prices rose at a rate of 3.1%. 
We’ve also included the inflation rate in the eurozone – the countries that use the euro –  for comparison. 
While there are some suggestions that inflation is slowing, with “positive underlying” numbers released today, economists still think the peak is yet to come, our business and economics correspondent Paul Kelso says. 
He explains that many analysts, including at the Bank of England, are expecting inflation to hit a high of 4% in September – a figure we will find out next month. 
“After that, there should be some respite. All the forecasts are expecting it to fall, just because of maths,” he says. 
“The big energy increases a year ago will drop out of the numbers, so that should bring a little respite,” he adds. 
By Sarah Taaffe-Maguire, business and economics reporter 
Inflation has remained relatively high, meaning goods are becoming more expensive, official figures show.
The rate of price rises remained at 3.8% in August, the same figure as July’s, according to data from the Office for National Statistics.
Prices are expected to continue rising, with the Bank of England forecasting that the rate will peak at 4% in September.
Tap below to read more on the announcement…
At 7am, we’ll get the latest inflation data, with economists widely expecting it to stay pretty much unchanged at 3.8% for August, as it was in July.
Inflation tells us the rate at which prices are rising, so it directly affects our cost of living. If wages fail to increase at the same pace, the value of your money decreases.
It is affected by lots of different factors, including global conflicts and international trade policies. Some argue Brexit has also had a negative impact.
In the UK, inflation is measured monthly – comparing how much prices are going up to the same time a year previously.
The headline inflation figure, which you’ll see a lot in the news, measures price rises across a range of products that we need in our daily lives.
The most commonly used inflation index is the Consumer Price Index, which the government has a target of getting to 2%.
One thing to note is that falling inflation doesn’t mean prices are coming down – just that they’re rising less quickly. You’d need a minus figure, or negative inflation, to see prices fall overall.
How does inflation affect interest rates?
The Bank of England raises interest rates to try to slow spending and encourage saving – when this happens, prices/inflation tend to come down.
When inflation falls, interest rates tend to.
Potential winners and losers from high inflation
Overall, a high and volatile rate of inflation is widely considered to be damaging for the economy, but there are some people who could benefit from it.
Workers with wage bargaining power (perhaps those who belong to strong trade unions) can come off better, as they can protect their incomes by bidding for higher wages.
Producers could end up benefiting if their prices rise more quickly than their costs.
People with stocks or property could also see the value of their assets rise if there is a sustained period of price inflation.
However, retired people on fixed incomes are likely to be worse off as inflation cuts the real value of their pensions and other savings.
The poorest will also feel the pinch more as the costs of borrowing, food and domestic utilities are high. 
Traditionally, first time buyers would opt for a smaller home to get onto the property ladder, and slowly build their way up to owning a family home.
More of them are now skipping the first steps and jumping straight into their larger “forever home”, new data from Barclays has found. 
A third of first time buyers bought a semi-detached home last month – 1.7% more than the same time last year, the bank said. 
Meanwhile, flats declined in popularity by 2.7%, accounting for a fifth of first time buyer homes.
A third of recent buyers aged 18 to 27 said they bought a “forever home” so that they wouldn’t have to move.
At the same time, Barclays data shows more people are choosing longer mortgage terms of 30 years or more. 
Among first time buyers, these account for 41.3 per cent of purchases, as they are typically younger and so have longer to pay back a mortgage.
Be the first to get Breaking News
Install the Sky News app for free

source