CPIH-consistent inflation rate estimates for UK household groups: October to December 2021

• The Consumer Prices Index including owner occupiers' housing costs (CPIH) is our most comprehensive measure of consumer price inflation.

• Producing CPIH-consistent inflation rates for different household groups provides an insight into how price changes can vary between different groups, within an established framework based on economic principles.

• High-income households experienced a higher rate of inflation than low-income households for most of 2021, however they saw similar rates of inflation for Quarter 4 (Oct to Dec) 2021.

• High-income households' experience of inflation is being driven by rising transport costs, on which they spend a larger proportion of their expenditure when compared with low-income households, while for low-income households housing-related costs are more of a factor.

Weights

Price indices are constructed using price and expenditure data. These expenditure shares can be calculated using different methodological approaches; the main two are democratic and plutocratic weighting. Indices for both methodological approaches can be found in the data downloads section. Our methodology article Investigating the impact of different weighting methods on CPIH compares the two approaches, alongside additional approaches to weighting a price index.

Limitations

This analysis uses the same items collected in the Consumer Prices Index including owner occupiers' housing costs (CPIH), along with the same prices, so the differences between the household groups are driven by differing spending patterns, rather than differing items, price increases or substitutions. An analysis of household group-specific inflation rates would ideally use price indices and expenditure weights specific to each household group. This would reflect the fact that different households will purchase goods and services from different outlets and therefore face different prices.

The spending patterns used in this analysis are at a two-year lag, for example, the 2021 data use spending pattern information from 2019. Given that spending patterns have changed throughout the coronavirus (COVID-19) pandemic, it is important to bear this in mind as a limitation.

For more information on the methodology used to construct this analysis, please see the related Methodology to calculate CPIH-consistent inflation rates for UK household groups.

Quality

Users should note that the CPIH-consistent inflation rates for different household groups are experimental indices and therefore we would caution against any use other than for research purposes.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in our CPIH-consistent inflation rates for UK household groups QMI.