Inflation
Councils are currently grappling with inflation's impact on budget gaps, the viability of housing projects, and the rising costs of services and pension fund performance.
Barnet Council is currently facing challenges with housing development projects, as inflation, rising interest rates, and reduced buyer demand are making some schemes unviable, as heard by the Finance and Growth Overview and Scrutiny Sub-Committee in September 2026. Kensington and Chelsea Council also projects a £127.2 million budget gap by 2030/31, partly driven by higher inflation assumptions, according to its Medium-Term Financial Strategy presented in July 2026.
Inflation is also affecting service costs and funding decisions. Enfield Council's Cabinet approved a 4.8% rent increase for council tenants for 2026/27, attributing it to rising inflation in March 2026. In January 2026, Croydon's General Purposes Committee recommended annual inflationary increases to councillors' expenses, reflecting a 4.1% Consumer Price Index rise, for Full Council consideration. Barking and Dagenham Council's Cabinet approved a draft budget strategy in December 2025, including a proposed 4.99% council tax increase, and plans to consult residents on this.
Pension funds are also navigating inflationary pressures. Brent Pension Fund identified inflation as a significant risk with high likelihood and impact in March 2026, citing the geopolitical situation as a key driver. Kingston upon Thames Pension Fund's investment returns lagged benchmarks over three and five-year periods, despite a strong quarterly performance in the quarter ending June 2026.
Key facts
- Barnet Council's Finance and Growth Overview and Scrutiny Sub-Committee heard in September 2026 that inflation is making some housing schemes unviable. Source
- Kensington and Chelsea Council faces a projected budget gap of £127.2 million by 2030/31, partly due to higher inflation assumptions. Source
- Enfield Council's Cabinet approved a 4.8% rent increase for council tenants for 2026/27, attributed to rising inflation. Source
- Croydon's General Purposes Committee recommended annual inflationary increases to councillors' expenses, reflecting a 4.1% CPI rise, in January 2026. Source 1 Source 2
- Barking and Dagenham Council's Cabinet approved a draft budget strategy in December 2025, including a proposed 4.99% council tax increase, partly due to a £7.4 million inflation pressure. Source
About this summary
This summary was written automatically from our published stories and the council meeting records they draw on, with background from Wikipedia. It describes what councils have discussed and decided; it does not take a view on any decision. Each key fact links to the story it comes from. Updated 30 September 2026. Spotted a mistake? Email community@opencouncil.network.