Global inflation is rising again in 2026, and energy is the main cause. On 13 October 2026 the IMF's October World Economic Outlook forecast global headline inflation of 4.7% for 2026, easing to 4.1% in 2027. Core inflation, which leaves out food and energy, is projected at 3.9% and 3.7%. The latest national data point the same way. In September 2026 US consumer prices rose 3.7% from a year earlier, euro area prices 3.8% and UK prices 3.5%. In all three, fuel was the largest single driver. Central banks have responded by raising rates rather than cutting them.
This page was first published in April 2026. It now uses data available up to 25 October 2026.
The latest numbers (as of 25 October 2026)
| Measure | Latest reading | Source and date |
|---|---|---|
| Global headline inflation, 2026 forecast | 4.7% (4.1% in 2027) | IMF WEO, 13 Oct 2026 |
| Global core inflation, 2026 forecast | 3.9% (3.7% in 2027) | IMF Blog, Oct 2026 |
| Global growth, 2026 forecast | 3.1% (3.4% in 2027) | IMF WEO, 13 Oct 2026 |
| US CPI, 12 months to September | 3.7% headline, 2.6% core, energy +20.4% | BLS, 14 Oct 2026 |
| Euro area HICP, September | 3.8% (August 3.2%), energy +18.9% | Eurostat, 16 Oct 2026 |
| UK CPI, 12 months to September | 3.5% (August 3.1%), core 2.8% | ONS, 21 Oct 2026 |
United States
The Bureau of Labor Statistics reported on 14 October 2026 that the all-items CPI rose 0.6% in September on a seasonally adjusted basis, after 0.4% in August. Gasoline rose 9.1% in the month and accounted for more than half of the monthly increase. Over 12 months, energy was up 20.4% and the index excluding food and energy was up 2.6%. That gap of about one percentage point between headline and core inflation is the main point: so far the shock is mostly fuel, not broad price pressure across the economy. October CPI is scheduled for 10 November 2026.
Time left until 10 November 2026 · start of day UTC
Euro area
Eurostat put euro area annual inflation at 3.8% in September 2026, up from 3.2% in August. Energy inflation rose to 18.9% from 14.3%. Services went to 3.2% from 3.0%, food, alcohol and tobacco to 1.3%, and non-energy industrial goods eased to 1.1%. Romania (6.5%), Lithuania (6.1%) and Bulgaria (5.6%) had the highest rates in the EU, and Sweden (1.0%) the lowest.
United Kingdom
The ONS reported CPI inflation of 3.5% in the 12 months to September 2026, the highest since October 2025. CPIH was 3.6%, core CPI 2.8% and services 3.7%. Motor fuel prices were 29.8% higher than a year earlier, and transport contributed 0.94 percentage points to the annual rate. The next release is due on 18 November 2026.
Why inflation is rising: an energy supply shock
Oil and gas supply through the Gulf has been disrupted by the war in the Middle East. In 2024 about 20 million barrels a day of oil passed through the Strait of Hormuz, roughly 20% of global petroleum liquids consumption, along with around one-fifth of global LNG trade (US EIA). In its April 2026 Short-Term Energy Outlook, the EIA described the strait as effectively closed since 28 February 2026.
On 7 October 2026, IMF Managing Director Kristalina Georgieva said "oil prices remain around $100 per barrel." She described natural gas supply from the Gulf as "severely impaired" and said "shipping through the Strait of Hormuz remains threatened." The ECB's account of its September meeting put oil at USD 97 per barrel, with gas 17% higher than in July.
This kind of inflation is cost-push: higher input costs pass through to transport, goods and eventually services. It is not demand-pull, where spending outruns supply, as in the 2021–22 US surge, when CPI rose 9.1% in the year to June 2022 (BLS). World Bank research finds that oil price and global demand shocks together explained 65% of global inflation variation in 2001–22, and global supply shocks 13%.
The distinction matters for policy. Higher interest rates cannot add oil supply. What they can do is stop a fuel shock from spreading into wages and services prices. That is why central banks focus on these so-called second-round effects.
How central banks are responding
The easing cycle has turned. Georgieva said on 7 October that "the U.S. Federal Reserve, the ECB, and the Bank of Japan have raised rates."
- Federal Reserve: On 16 September 2026 the FOMC raised the federal funds target range by 0.25 percentage point to 3.75–4.00%, by a 12–0 vote, saying "inflation remains elevated." The median projection in the September Summary of Economic Projections was 3.7% PCE inflation for 2026. The Fed's longer-run goal is 2% inflation measured by the PCE price index. The next meeting is scheduled for 27–28 October.
- European Central Bank: The ECB raised its three key rates by 25 basis points in June and again in September 2026. Since 16 September the deposit facility rate has been 2.50%. September staff projections put headline HICP inflation at 3.0% for 2026, 2.5% for 2027 and 2.1% for 2028. The ECB says it decides meeting by meeting, without committing to a rate path.
- Bank of England: The MPC held Bank Rate at 3.75% on 16 September 2026 by a 6–3 vote. Megan Greene, Catherine L Mann and Huw Pill voted for 4%. The Committee judged risks to the inflation outlook "tilted to the upside." Its next decision is on 5 November 2026.
- Bank of Japan: It has raised rates, according to the IMF statement above. Its next policy meeting is listed for 29–30 October 2026.
The IMF's advice, in its October 2026 blog, is that monetary policy "should remain firmly focused on price stability," stay "sufficiently restrictive to return inflation to target in a timely manner," and "tighten further" if commodity prices and technology-related investment keep adding pressure.
Is your cash keeping up with inflation?
Enter the interest rate you earn on savings after tax and the latest inflation rate where you live to see your real return.
| Your savings rate after tax | Latest annual inflation rate (12 months to September 2026: US 3.7%, euro area 3.8%, UK 3.5%) | Approximate real return on your cash |
|---|---|---|
| 3 % | 3.7 % | -0.7 % |
| 3 % | 3.8 % | -0.8 % |
| 3 % | 3.5 % | -0.5 % |
- The savings rate is your own input, not a figure from any source.
- A negative result means your cash loses purchasing power at the rates entered; a positive result means it keeps ahead of them.
This is simple subtraction on your inputs only: it does not forecast future inflation or rates, and it leaves out compounding, fees and how inflation differs between households.
Risks to the outlook
The IMF says risks are "tilted to the downside." It names three: further escalation of conflicts, renewed trade tensions and fiscal vulnerabilities. In an adverse scenario it says growth in 2027 would be "materially lower" and inflation "significantly higher." On the upside it names stronger momentum in AI investment and a sustained easing of geopolitical and trade tensions.
Inside the ECB, members disagreed about how long the shock could last. Some pointed to low European gas storage before winter. Others argued the shock is largely political and that faster substitution towards renewables may soften the effect of gas prices compared with 2022.
What the numbers mean for households and investors
- Watch core, not just headline. With US core CPI at 2.6% against 3.7% headline, the energy part of inflation could fade fast if supply returns, or spread if wage and services inflation pick up. In the UK, core (2.8%) and services (3.7%) are already rising.
- Real returns on cash. Savings earning less than the inflation rate lose purchasing power. Compare your rate after tax with the latest CPI.
- Inflation-linked bonds. US Treasury Inflation-Protected Securities (TIPS) adjust their principal with the CPI. At maturity, holders "never get less than the original principal" (TreasuryDirect). They come in 5-, 10- and 30-year terms, with interest paid every six months.
- Market inflation expectations. The 10-year breakeven rate, the yield gap between nominal Treasuries and TIPS of the same maturity, shows what bond markets expect inflation to average. It is published daily on FRED.
- Bitcoin. Only 21 million bitcoins will ever be created, and new issuance is "automatically halved over time" (bitcoin.org). The same source says its price "is still very volatile." A fixed supply does not make Bitcoin a reliable hedge over months: its price can fall during the same shocks that push inflation up.
This is general information, not investment advice. Crypto assets can lose much of their value quickly.
Indicators to track next
- US CPI for October: 10 November 2026 (BLS).
- Central bank decisions: Fed (27–28 October), BoJ (29–30 October), BoE (5 November).
- Euro area flash HICP: published by Eurostat at the start of each month.
- UK CPI for October: 18 November 2026 (ONS).
- Oil, gas and shipping through Hormuz: the EIA Short-Term Energy Outlook each month.
- Breakeven inflation: FRED, daily.
Limitations: national data cover the US, euro area and UK only, and IMF forecasts depend on energy assumptions that can change quickly.
