The annual rate of inflation has exceeded the 2025-26 local government pay rise for a fourth month in a row.
Prices rose by 3.8% in the year to July 2025, according to the government's preferred consumer prices index (CPI) measure, reported the Office for National Statistics (ONS) today.
The CPI rate was 3.6% in June, 3.4% in May and 3.5% in April, compared with the 3.2% increase in pay agreed for council staff in England, Wales and Northern Ireland this year.
Last month, the Bank of England reported that it expected CPI inflation to rise to 4% by September 2025, due to higher food prices, before falling back towards its target of 2%.
The local government pay round was settled last month, after two of the three unions representing staff - UNISON and GMB - agreed to employers' initial offer, despite it being rejected by members in consultative ballots.
Staff covered by the National Joint Council for Local Government Services (NJC) agreement are likely to have just received - or to shortly receive - the increase, including backdated pay from April 2025.
The NJC settlement is less than the 4% rise agreed for local government staff in Scotland and the 3.6% settlement for NHS staff on Agenda for Change contracts in England, Wales and Northern Ireland, including social workers. The latter has been rejected by members of several unions in consultative ballots.
