Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of investment in artificial intelligence data centres on inflationary pressures in the UK economy.

HM Treasury continuously monitors developments in the economy, including the drivers of inflation and wider cost-of-living pressures. The inflationary impact of investment in AI data centres will depend on its scale, timing and interaction with wider supply conditions. While investment in AI data centres could in principle add to inflationary pressures, we have not seen evidence to date of a significant impact in the aggregate inflation data.

The Office for Budget Responsibility’s (OBR) forecast that inflation was due to return close to target in Q2 this year, before the impact of the war in Iran began to increase motor fuel prices.

The Monetary Policy Committee at the Bank of England has responsibility for controlling inflation, and the Government has full confidence that it will sustainably return inflation to the 2 per cent target. The Government supports the Bank of England through responsible fiscal policy, alongside targeted support for the cost of living. The OBR forecast that government policy will reduce CPI inflation by 0.4 percentage points in 2026/27.