Hitting fiscal targets, such as reducing the national debt, will require a careful balancing of the books from the current government, and the possibility for either spending cuts or tax rises. Although Labour ruled out raising the main government tax sources, Income Tax, National Insurance, and VAT, at the 2024 election, they did raise National Insurance for employers (rather than employees) and also cut Winter Fuel allowances for large numbers of pensioners. Less than a year after implementing cuts to Winter Fuel, the government performed a U-Turn on the issue, and will make it widely available by the winter of 2025. The archipelago formed by Great Britain and the numerous smaller islands is as irregular in shape as it is diverse in geology and landscape.
Meanwhile, Reeves has a bunch of spending commitments aimed at easing the cost of living as inflation remains stubbornly high, including making up for a series of about-faces on planned welfare cuts. Overall, the budget was strikingly similar to Reeves’ first budget a little more than a year ago, even though she insisted at the time that it would be the one and only big tax-raising budget in this parliamentary term, due to run to 2029. UK Visas and Immigration (UKVI) is responsible for making millions of decisions every year about who has the right to visit or stay in the country, with a firm emphasis on national security and a culture of customer satisfaction for people who come here legally. England, Wales and Scotland each have their own national symbols, including their national flags. Northern Ireland also has symbols, many of which are shared with the Republic of Ireland. Although the Retail Price Index is a commonly utilized inflation indicator, the UK also uses a newer method of calculating inflation, the Consumer Price Index.
- As of December 2024, this was 3.2 percent, slightly higher than the overall CPI rate, but more aligned with the overall figure than it was in 2022 and 2023.
- Lowland areas include Cornwall, the New Forest, the South Downs and the Norfolk Broads.
- This followed 2022, when RPI inflation reached a rate of 11.6 percent, by far the highest annual rate during this provided time period.
- The United Kingdom bears the extra burden of Brexit, which has knocked billions off the economy since the country left the European Union in 2020.
But speculation is swirling about a potential challenge to Starmer’s leadership from within his party, and analysts say a misfiring budget could add to the sense of crisis within the government. Then, the entire fiscal forecast from the independent watchdog the Office for Budget Responsibility (OBR), including details of the budget’s main measures, was published online half an hour before Reeves’ statement. Reeves also abolished a much-hated cap on benefits paid out to families with more than two children. She also announced measures to ease the financial pressure on households, by freezing rail fares and cutting levies on household energy bills. But the chaos that has engulfed the government during weeks of mixed messaging and political infighting continued up to the final moment.
While the retail price index is still a popular method of calculating inflation, the consumer price index (CPI) is the current main measurement of inflation in the UK. There is also an additional price index, which includes some extra housing costs, known as the Consumer Price Index including homer occupiers’ costs (CPIH) index, which is seen by the UK’s Office of National Statistics as the official inflation rate. As of December 2024, the CPI inflation rate stood at 2.5 percent, while the CPIH rate was 3.5 percent. Since 1999 Wales has had a devolved national government and legislature, known as the Senedd. It has more limited powers than those devolved to Scotland.224 The Senedd can legislate on any matter not specifically reserved to the UK Parliament by Acts of Senedd Cymru.
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England’s highest mountain is Scafell Pike, at 978 metres (3,209 ft) in the Lake District; its largest island is the Isle of Wight. The UK inflation rate was 3.6 percent in October 2025, down from 3.8 percent in the previous two months, which was the fastest rate of inflation since January 2024. Between September 2022 and March 2023, the UK experienced seven months of double-digit inflation, which peaked at 11.1 percent in October 2022. Due to this long period of high inflation, UK consumer prices have increased by over 20 percent in the last three years.
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Despite an uptick in inflation in 2025, the inflation rate is expected to fall to 2.5 percent in 2026, and two percent between 2027 and 2029. One of the main consequences of high inflation and low wage growth throughout 2022 and 2023 was an increase in industrial action in the UK. In December 2022, for example, there were approximately 830,000 working days lost due to labor disputes. Throughout this month, workers across various industry sectors were involved in industrial disputes, such as nurses, train drivers, and driving instructors.
Since World War II, however, the United Kingdom’s most prominent exports have been cultural, including literature, theatre, film, television, and popular music that draw on all parts of the country. Perhaps Britain’s greatest export has been the English language, now spoken in every corner of the world as one of the leading international mediums of cultural and economic exchange. Another way of measuring inflation is to strip out the volatility of energy and food prices and look at the underlying core inflation rate. As of December 2024, this was 3.2 percent, slightly higher than the overall CPI rate, but more aligned with the overall figure than it was in 2022 and 2023.
The budget followed weeks of messy mixed messaging and political acrimony that continued into the minutes before Reeves stood in the House of Commons. Other measures included a mansion tax, changes to the capital gains tax regime, higher gambling taxes, a new levy on electric car use and a cut to tax-free provisions for private pensions. The biggest change in terms of money raised is freezing the thresholds at which earners pay Britain’s different tax levels for a further three years from 2028, meaning as wages rise, more people fall into higher tax brackets. A court found a health trust had failed to provide safe care for Ellame at Worthing Hospital. Though previous attempts at uniting the two kingdoms within Great Britain in 1606, 1667 and 1689 had proved unsuccessful, the attempt initiated in 1705 led to the Treaty of Union of 1706 being agreed and ratified by both parliaments.
The government was elected in a landslide victory in July 2024 on a promise not to raise taxes on income for working people, and Reeves acknowledged that some of the budget’s £26 billion ($34 billion) in tax hikes broke the spirit of that pledge and would face non gamstop casinos criticism. Since leaving the EU most disputes under UK-EU agreements are addressed through consultation between the parties. In 1982 Argentina invaded the British territories of South Georgia and the Falkland Islands, leading to the 10-week Falklands War in which Argentine forces were defeated. The inhabitants of the islands strongly favour British sovereignty, expressed in a 2013 referendum. From 1984 the British economy was helped by the inflow of substantial North Sea oil revenues.114 Another British Overseas Territory, Gibraltar,115 is a key military base; a referendum in 2002 on shared sovereignty with Spain was rejected.
