The Economic Mathematics of the Mill: JPT’s 2026 Inflation & Price Forecast

The latest data from the Office for National Statistics (ONS) has confirmed what many in manufacturing already suspected: the UK economy unexpectedly flatlined in January 2026. With 0% GDP growth, the UK is facing a "stagflationary" trap—where a stalled economy meets a massive, geopolitical energy shock.

At JPT, we believe in leading with transparency. We have always been open with our customers regarding supply and potential future pricing, and we are now taking the next step. We are formally forecasting that the wider paper industry will move 15-25% in the next few weeks.

The Industry-First Forecast: What This Means for Your Costs

Based on current energy trajectories and raw material movements, we anticipate this industry-wide shift will equate to a 5-7% increase in the price of finished tubes. 

Important Note: Because the market remains exceptionally volatile and definitive mill announcements are still To Be Confirmed (TBC), this is merely our internal forecast. We are sharing it now to ensure our partners can plan their Q2 and Q3 budgets with accurate data rather than being blindsided by sudden hikes.

The Anatomy of the Shock: Why Paper is Moving

To understand the price of a tube, you have to understand the "Mathematics of the Mill." While fibre is a significant cost, energy is the volatile driver. In a modern paper mill, energy (natural gas and electricity) now accounts for approximately 30% of the total cost of making paper.

1. The Gas Surge: 70p to 120p (GBp/thm)

Natural gas is the primary fuel used to dry paperboard—the most energy-intensive part of the production process. We have seen a sustained shift from a 70p/therm baseline to a plateau of 120p/therm.

• The "Burnt" Reality: Unlike cardboard, which can be recycled and retains residual value, this gas is "burnt." Once used in the drying hoods, that cost is permanently "baked into" the product. With gas up over 70%, that 30% cost-weighting at the mill is pulling the entire industry higher.

  
  

2. The Oil Multiplier: $60 to $100 USD

Oil has moved from a previous baseline of $60 to a sustained plateau of $100 USD.

• The Formula: Analysts estimate that every $10 USD increase in oil adds roughly 0.2pp to 0.4pp to headline inflation. A sustained $40 jump exerts massive "cost-push" pressure on fuel, logistics, and every resin-based component used in the packaging process.

Below is how a cost build up might look in a Paper Mill Mill.

Cost Component	Baseline (Pre-Crisis)	Sustained Shock (Current)
Waste Paper (OCC)	£130.00	£156.00
Process Conversion/Fibre Refinement/Overheads	£155.00	£157.50
Energy (Gas/Elec) ~30%	£142.50	£243.60
Logistics & Chemicals	£47.50	£61.75
Total Base Cost per Tonne	£475.00	£618.85

The "JPT" UK Inflation Forecast (CPI)

While the Bank of England was dreaming of a return to the 2.0% target by summer, the $100 oil plateau and 120p gas surge have effectively torn up that script.

• Current Baseline: 3.0% (as of January 2026).

  
  

• The Energy "Add-On": With a sustained $40 increase in oil and a 70% jump in gas, we expect a "cost-push" lag of approximately 1.2 to 1.5 percentage points to hit the headline CPI over the next two quarters.

• Our Forecast: We expect UK CPI to rebound and peak between 4.2% and 4.8% by Q3 2026, before stubbornly refusing to drop below 3.5% for the rest of the year.

The JPT Closing Argument: Why Resilience Trumps Price in 2026

In an era of $100 oil and 120p gas, the old way of buying tubes is dead. If you are still chasing the "cheapest quote" from a supplier operating hand-to-mouth, you aren't saving money—you’re buying risk.

When the market moves 25% overnight, a low-cost supplier without a buffer is simply a supplier that can't fulfill your order.

At Just Paper Tubes, we don’t play that game. We’ve invested millions into a strategic raw material reserve so that when the world catches fire, your production line stays cool.

Why choose JPT?

A Message from our Managing Director: Why Stock is the Only True Currency

"In a market this volatile, 'wait and see' isn't a strategy—it’s a gamble. While others might keep their heads in the sand, waiting for official mill announcements to break, we believe our customers deserve the truth in real-time.

The mathematics of the mill are undeniable. With energy now representing 30% of production costs and gas sustained at 120p, the industry is on the verge of a 15–25% shift. By forecasting a 5–7% increase in finished tubes now, we are giving our partners the one thing a 'hand-to-mouth' supplier can’t: time to plan and prepare their own budgets.

In times like these, you’ve got to secure essential stock. You cannot wind cores with a 'TBC' announcement or a promise of future pricing. Our independence is your advantage. With the UK’s widest supply network and zero debt-leverage, we make decisions based on our customers' needs, not a corporate board's bottom line.

We aren't just selling cores; we are providing the communication and the physical supply security you need to keep your lines running while the rest of the market catches up. Don’t wait for the price hike to land—secure your supply from JPT while our buffer is still open."