Prices in the UK went up by 2.3% in the 12 months to October, which means inflation is back above the Bank of England's target. The Bank puts interest rates up and down to try to keep inflation at 2%. In November, it cut rates for the second time in 2024, taking them to 4.75%. What is inflation? Inflation is the increase in the price of something over time. For example, if a bottle of milk costs £1 but is £1.05 a year later, then annual milk inflation is 5%.