Key facts
- UK inflation forecast to average 3.4% in 2027.
- Price growth expected to peak at 3.75% in early 2027.
- Inflation projected to reach 2% by 2030.
- September inflation reached 3.5%, the highest since October 2025.
The UK's Office for Budget Responsibility (OBR) forecast on Wednesday that inflation would average 3.4% in 2027, a revision upwards from previous projections. The watchdog anticipates inflation peaking at 3.75% in early 2027, before settling at 2% by 2030. This outlook follows a recent rise in British inflation to 3.5% in September, driven by increased energy prices linked to the Iran war. The OBR's revised forecasts were prepared after the conflict began at the end of February.