--- title: "Inflation: “We Were Just on a Break.”" description: Inflation is showing signs of returning as rising energy and manufacturing costs put pressure on UK households and savers. Matthew Jones explores how physical gold may help protect long-term purchasing power. image: https://www.britanniabullion.com/hubfs/image%20(60).png --- [Skip to content](https://www.britanniabullion.com/blog/inflation-we-were-just-on-a-break#main-content) [Call: +44 20 4572 2034](tel:+442045722034) [![Britannia Bullion](https://www.britanniabullion.com/hs-fs/hubfs/britannia-bullion-theme/logo-crisp.webp?width=235&height=175&name=logo-crisp.webp "Britannia Bullion")](https://www.britanniabullion.com/) - [Home](https://www.britanniabullion.com/) - [Our Approach](https://www.britanniabullion.com/our-approach) - Gold - [Why Gold](https://www.britanniabullion.com/why-gold) - [Why Now](https://www.britanniabullion.com/why-now) - [Buying Gold](https://www.britanniabullion.com/buying-gold) - [Selling Gold](https://www.britanniabullion.com/selling-gold) - [Tax Advantages](https://www.britanniabullion.com/tax-advantages) - [Live Pricing & MKT Trends](https://www.britanniabullion.com/live-pricing-mkt-trends) - [About Us](https://www.britanniabullion.com/about-us) - Resources - [Insights](https://offers.britanniabullion.com/blog) - [Case Studies](https://145917567.hs-sites-eu1.com/case-studies) - [Podcast](https://www.britanniabullion.com/podcast) - [In The Media](https://www.britanniabullion.com/in-the-media) - [FAQs](https://www.britanniabullion.com/faqs) - Free Guides - [Beginners Guide To Investing In Gold](https://www.britanniabullion.com/beginners-guide-to-investing-in-gold) - [Company Brochure](https://www.britanniabullion.com/company-brochure) - [The Farmers Guide To Investing In Gold](https://www.britanniabullion.com/farmers-guide-to-investing-in-gold) - [The Great British Banking Betrayal](https://www.britanniabullion.com/the-great-british-banking-betrayal) - [The Beasts Series](https://www.britanniabullion.com/the-beasts-series) - [Gold Products](https://shop.britanniabullion.com/) [Start a conversation](https://cta-eu1.hubspot.com/web-interactives/public/v1/track/click?encryptedPayload=AVxigLL67YmIxDE5BOBykXJASBZ1Br9wqbzoT3YjA9TYH4gzMGnS5%2FgNv5tIcVKcYtSFBzkzqsZ7x9hedI1%2FSjh7cYTnxEnncNOzAx%2Bh8aP4R9gytSDizysh9TIQLId5ulORJh1xVsrVqJ4J3VND5EgqkMX9pgZpCVMjEui7sL88dXVx1c53FW3dE0MM4Eyv1g9v7iI40CpGLyawhD%2FdjxB2aFVtdDc4KSRTANV8wAtbyBN%2BzQ%3D%3D&portalId=145917567) - [Home](https://www.britanniabullion.com/) - [Our Approach](https://www.britanniabullion.com/our-approach) - Gold - [Why Gold](https://www.britanniabullion.com/why-gold) - [Why Now](https://www.britanniabullion.com/why-now) - [Buying Gold](https://www.britanniabullion.com/buying-gold) - [Selling Gold](https://www.britanniabullion.com/selling-gold) - [Tax Advantages](https://www.britanniabullion.com/tax-advantages) - [Live Pricing & MKT Trends](https://www.britanniabullion.com/live-pricing-mkt-trends) - [About Us](https://www.britanniabullion.com/about-us) - Resources - [Insights](https://offers.britanniabullion.com/blog) - [Case Studies](https://145917567.hs-sites-eu1.com/case-studies) - [Podcast](https://www.britanniabullion.com/podcast) - [In The Media](https://www.britanniabullion.com/in-the-media) - [FAQs](https://www.britanniabullion.com/faqs) - Free Guides - [Beginners Guide To Investing In Gold](https://www.britanniabullion.com/beginners-guide-to-investing-in-gold) - [Company Brochure](https://www.britanniabullion.com/company-brochure) - [The Farmers Guide To Investing In Gold](https://www.britanniabullion.com/farmers-guide-to-investing-in-gold) - [The Great British Banking Betrayal](https://www.britanniabullion.com/the-great-british-banking-betrayal) - [The Beasts Series](https://www.britanniabullion.com/the-beasts-series) - [Gold Products](https://shop.britanniabullion.com/) [Start a conversation](https://cta-eu1.hubspot.com/web-interactives/public/v1/track/click?encryptedPayload=AVxigLL67YmIxDE5BOBykXJASBZ1Br9wqbzoT3YjA9TYH4gzMGnS5%2FgNv5tIcVKcYtSFBzkzqsZ7x9hedI1%2FSjh7cYTnxEnncNOzAx%2Bh8aP4R9gytSDizysh9TIQLId5ulORJh1xVsrVqJ4J3VND5EgqkMX9pgZpCVMjEui7sL88dXVx1c53FW3dE0MM4Eyv1g9v7iI40CpGLyawhD%2FdjxB2aFVtdDc4KSRTANV8wAtbyBN%2BzQ%3D%3D&portalId=145917567) [← All insights](https://www.britanniabullion.com/blog) # Inflation: “We Were Just on a Break.” Oct 16, 2026 · Matthew Jones ![](https://www.britanniabullion.com/hubfs/image%20(60).png) *The relief was short-lived. The bills keep getting bigger.* **By Matthew Jones | Co-founder & Precious Metals Analyst, Britannia Bullion** **15 October 2026** We thought we had seen the back of it. The expensive habits. The uncomfortable conversations. The feeling that, however much we put into the relationship, we were getting less out of it. Then inflation walked back through the door. “We were just on a break.” For British households still paying the price of its last visit, the joke wears thin rather quickly. The latest warning comes from America, where September’s producer prices rose 6.3% over the year, the fastest annual increase since December 2022.\[1\] When America sneezes, Britain has good reason to reach for the tissues. Global energy markets, trade and financial conditions connect our economies. But we do not need to look across the Atlantic to find evidence of renewed pressure. Britain has figures of its own. UK consumer price inflation rose from 2.9% in July to **3.1% in August**. The broader CPIH measure, which includes owner occupiers’ housing costs, rose to **3.3%**. Transport, particularly motor fuels, made the largest upward contribution to the change in both annual rates.\[2\] These are the latest available UK consumer inflation figures as I write. September’s release is due on 21 October.\[3\] The pressure is visible further back in the supply chain too. Prices for materials and fuels bought by UK manufacturers were **6.1% higher than a year earlier** in August, up from 5.8% in July. Factory gate prices rose **3.7%**, up from 3.3%. Refined petroleum products were a major driver of the acceleration.\[4\] Those figures measure different things. A 6.1% rise in manufacturers’ input costs does not mean household inflation is about to hit 6.1%. My concern is that businesses are facing renewed cost pressures while households are still adjusting to the last round of price increases. Energy costs travel through an economy. They travel in the diesel used to deliver supermarket supplies, the machinery working on a building site and the aircraft bringing goods into the country. A business may absorb some of the increase. It may accept a smaller margin, postpone investment or find savings elsewhere. But none of those options is unlimited. Sooner or later, the pressure reaches somebody’s pocket. For Britain, the exchange rate adds another complication. Imported costs depend partly on what happens to sterling. A weaker pound can make foreign goods and internationally priced energy more expensive in pounds; a stronger pound can soften the impact.\[5\] Paying in sterling does not insulate us from the world outside. And there is something else that gets lost whenever we celebrate a lower inflation rate. **The previous price increases do not disappear.** If a £100 shopping basket rises to £110, and inflation then slows to 2%, that basket becomes £112.20. Nobody refunds the £10. For a household whose income has not kept pace, the improvement in the headline offers limited comfort. They are still paying more, and the next increase starts from that higher level. That is why another acceleration matters. It arrives before many people feel they have recovered from the last one. For savers, the arithmetic deserves particular attention. Imagine £100,000 earning no interest. If prices rose by 3.1% over the following year, something costing £100,000 today would cost £103,100. The bank balance would still say £100,000. The shortfall would be £3,100. That is an illustration using August’s annual inflation rate, not a forecast. But it shows why the number on a statement tells only part of the story. Interest can help close the gap. What matters is the return after inflation and any tax due, measured against the things you actually need to buy. For someone saving towards retirement, helping children onto the property ladder or leaving money to the next generation, purchasing power is the point of the exercise. They spent years earning that money. They should care what those years of work will buy. The Bank of England, meanwhile, faces an awkward task when rising costs originate in energy and imported supplies. Higher interest rates can restrain spending and help contain wider inflation pressure. They cannot produce diesel, reopen a disrupted shipping route or instantly increase refining capacity. They can, however, increase the cost of mortgages and business borrowing. **An interest rate decision cannot deliver a tanker of fuel.** That is the uncomfortable possibility behind these figures: higher living costs alongside pressure on growth, household budgets and business investment. It is also why I believe physical gold deserves a serious place in the conversation about protecting wealth. For our clients, that conversation takes place in pounds. The relevant gold price is the sterling price they pay when buying and receive when selling. A dollar gold headline alone cannot tell them their return. Gold’s sterling price reflects both its international dollar price and the pound’s exchange rate against the dollar. All else equal, a weaker pound raises gold’s value in sterling; a stronger pound lowers it. That gives gold a potential role when sterling weakens, although movements in the underlying gold price can offset or outweigh the currency effect. The appeal goes beyond exchange rates. Physical gold cannot be created by a monetary policy announcement. Outright ownership does not rely on an issuer promising to repay you. Those characteristics underpin my view that it can help diversify wealth held in cash and financial assets.\[6\] Gold prices fluctuate, and gold does not track UK inflation month by month. It pays no interest, while purchase premiums, selling spreads and holding costs matter. The argument for owning it rests on a longer horizon: holding part of your wealth in a tangible asset whose supply cannot be expanded at the stroke of a keyboard. At Britannia Bullion, we believe that deserves consideration by people who have worked hard to accumulate their savings and want to preserve something meaningful for the future. Inflation does not need to return to double digits to make that conversation worthwhile. Repeated increases of a few per cent can do considerable damage over time, particularly when savings fail to keep pace. A calmer period was welcome. It was never a guarantee that the problem had been permanently solved. Inflation says we were just on a break. **Britain’s savers could do with a more dependable relationship.** --- **About the author** Matthew Jones is Co-founder and Precious Metals Analyst at Britannia Bullion. He writes about gold, monetary policy and the economic forces shaping savers’ purchasing power, with a focus on the role of physical precious metals in long-term wealth preservation. *This article expresses the author’s opinions and is provided for general information, not personalised investment advice. Britannia Bullion sells physical precious metals and has a commercial interest in gold. Gold prices can fall as well as rise; returns are not guaranteed. Currency movements affect sterling gold prices. Purchase premiums, selling spreads and storage or insurance costs affect returns. Past performance is not a reliable indicator of future results.* **Sources** 1. [US Bureau of Labor Statistics: Producer Price Index, September 2026](https://www.bls.gov/news.release/archives/ppi_10152026.htm). 2. [Office for National Statistics: Consumer price inflation, UK, August 2026](https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/august2026). 3. [ONS: September 2026 consumer inflation release, scheduled for 21 October](https://www.ons.gov.uk/releases/consumerpriceinflationukseptember2026). 4. [ONS: Producer price inflation, UK, August 2026](https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/producerpriceinflation/august2026). 5. [Bank of England: Monetary Policy Report, November 2024, Box D, imported costs and sterling](https://www.bankofengland.co.uk/-/media/boe/files/monetary-policy-report/2024/november/monetary-policy-report-november-2024.pdf). 6. [Banque de France: How can we account for the increase in the price of gold?](https://www.banque-france.fr/en/publications-and-statistics/publications/how-can-we-account-increase-price-gold). 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No 16332341 | The information in this article is for educational purposes only and does not actually constitute financial advice. Past performance is not indicative of future results. The value of investments can fluctuate, and you may not recover the amount originally invested. Tax treatment depends on individual circumstances and may be subject to change. 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