Consumer price inflation, UK: June 2022

Price indices, percentage changes, and weights for the different measures of consumer price inflation.

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Cyswllt:
Email Philip Gooding

Dyddiad y datganiad:
20 July 2022

Cyhoeddiad nesaf:
17 August 2022

1. Main points

  • The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 8.2% in the 12 months to June 2022, up from 7.9% in May.

  • The largest upward contributions to the annual CPIH inflation rate in June 2022 came from housing and household services (principally from electricity, gas and other fuels, and owner occupiers' housing costs) and transport (principally from motor fuels).

  • On a monthly basis, CPIH rose by 0.7% in June 2022, compared with a rise of 0.4% in June 2021.

  • The Consumer Prices Index (CPI) rose by 9.4% in the 12 months to June 2022, up from 9.1% in May.

  • On a monthly basis, CPI rose by 0.8% in June 2022, compared with a rise of 0.5% in June 2021.

  • Rising prices for motor fuels and food made the largest upward contributions to the change in both the CPIH and CPI 12-month inflation rates between May and June 2022.

  • The largest, partially offsetting downward contributions to change in the rates were from second-hand cars and audio-visual equipment (principally recording media).

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2. Consumer price inflation rates

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 8.2% in the 12 months to June 2022, up from 7.9% in May. The annual rate was below 1.2% from April 2020, at the start of the first coronavirus (COVID-19) lockdown, to March 2021. The rate has since risen. The June 2022 figure is the highest recorded annual inflation rate in the National Statistic series, which began in January 2006. The rate was last higher in the constructed historical estimates in March 1991, when it stood at 8.3%. The largest contributions to the annual rate in June 2022 are from housing and household services, and transport. Their effects are shown in Figure 6 in Section 4.

The Consumer Prices Index (CPI) rose by 9.4% in the 12 months to June 2022, up from 9.1% in May. Similar to the CPIH, the rate has risen sharply over recent months and the June figure was the highest annual CPI inflation rate in the National Statistic series, which began in January 1997. Indicative modelled consumer price inflation estimates suggest that the CPI rate would last have been higher around 1982, where estimates range from nearly 11% in January down to approximately 6.5% in December. The main contributors to the June 2022 rate are shown in Figure 10 in Section 5.

On a monthly basis, CPIH rose by 0.7% in June 2022, compared with a rise of 0.4% in the same month a year earlier. The CPI monthly rate was 0.8%, compared with 0.5% in June 2021. The CPIH and CPI monthly rates for June 2022 were the largest rises between May and June since the start of the historical constructed series in 1988. Rising prices for motor fuels and food resulted in the largest upward contributions to the monthly rates in June 2022. In June 2021, the main upward contribution to the monthly rates came from transport overall.

Given that the owner occupiers' housing costs (OOH) component accounts for around 17% of the CPIH, it is the main driver for differences between the CPIH and CPI inflation rates. The inclusion of Council Tax and rates in CPIH is the only further difference in coverage. This makes CPIH our most comprehensive measure of inflation and, therefore, the figures in Section 3 and overall commentary in Section 4 in this bulletin focus on CPIH. While the coverage differs, the key drivers of the annual inflation rate are the same where they are common to both measures. Section 5 comments, mostly graphically, on the CPI.

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3. Notable movements in prices

The largest movements in the annual Consumer Prices Index including owner occupiers' housing costs (CPIH) inflation rate in June 2022 came from transport and food.

Transport

The annual increase for transport was 15.2% in June 2022. Over the past two years, the annual rate has risen from minus 1.5% in June 2020 (during the first coronavirus (COVID-19) lockdown) to the latest figure for June 2022.

Within transport, the high 12-month rate in June 2022 was mainly caused by a 42.3% rise in the price of motor fuels on the year. This is the highest rate since before the start of the constructed historical series in January 1989. Average petrol prices stood at 184.0 pence per litre in June 2022, compared with 129.7 pence per litre a year earlier. The June 2022 price is the highest on record (since 1990). The average price of diesel in June 2022, which was 192.4 pence per litre, was also the highest recorded.

The increase in the annual rate for transport between May and June 2022 was also caused by the changing price of motor fuels. Average petrol prices rose by 18.1 pence per litre in June 2022, the largest monthly rise on record (since 1990). This compares with a rise of 2.5 pence per litre a year ago. Diesel prices moved similarly, with a rise of 12.7 pence per litre this year, compared with 2.4 pence per litre a year ago.

Within transport, there was an offsetting, downward movement from second-hand cars, where prices fell by 2.5% on the month in 2022. This was the fifth consecutive monthly fall in prices. In comparison, prices rose by 4.4% between May and June 2021. In 2021, there were reports of increased demand, combined with reports of restricted supply.

Food and non-alcoholic beverages

Food and non-alcoholic beverage prices have risen by 9.8% in the year to June 2022, up from 8.7% in May, and the highest rate since March 2009. The annual rate partly reflects price rises over the latest few months, including a 1.2% rise between May and June 2022. This monthly rise was the largest between May and June since 2008, and it follows similar monthly rises into April and May 2022.

The increase in the annual rate for food and non-alcoholic drinks between May and June 2022 was driven by price movements across many of the more detailed classes. The largest upward effect came from milk, cheese and eggs, where prices of milk and cheese rose between May and June 2022, compared with price falls a year ago. Other upward effects came from vegetables, meat and other food products (such as ready meals).

Restaurants and hotels

Prices charged in restaurants and for accommodation rose by 8.6% in the year to June 2022, up from 7.6% in May. The annual rate to June 2022 was the highest since 8.6% recorded in August 2021, which was influenced by the effect of the previous year's Eat Out to Help Out scheme.

Prices rose by 1.2% between May and June 2022, compared with a smaller rise of 0.3% a year ago. However, it should be noted that some items within this category were imputed in June 2021 because they were still not available following the coronavirus lockdown earlier in the year. This means that monthly movements for those items in 2021 reflect imputed index movements and should be interpreted with caution.

Clothing and footwear

The annual rate for clothing and footwear was 6.1% in the year to June 2022, down from 6.9% in May. Prices were little changed on the month in 2022 but rose by 0.8% between May and June 2021. Prices normally fall at this time of year as the summer sales season begins, but there was little movement in 2022 and, in 2021, prices were still rising following the end of the coronavirus lockdown.

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4. Latest movements in CPIH inflation

Figure 4 shows the annual inflation rates for the Consumer Prices Index including owner occupiers' housing costs (CPIH) all goods and all services series, together with CPIH excluding energy, food, alcohol and tobacco (often referred to as core CPIH). The CPIH inflation rate is added for comparison.

The CPIH all goods index rose by 12.7% in the 12 months to June 2022, up from 12.4% in May. The rate has risen sharply since February 2021. The CPIH all services index rose by 4.5% in the 12 months to June 2022, up from 4.3% in May. The rate has also risen over the last year but less sharply than for goods. CPIH excluding energy, food, alcohol and tobacco rose by 5.2% in the 12 months to June 2022, unchanged from May.

On a monthly basis, CPIH rose by 0.7% in June 2022, compared with a rise of 0.4% in June 2021. Figure 5 shows how each of the main groups of goods and services contributed to the change in the CPIH 12-month inflation rate between May and June 2022. To understand what has changed the inflation rate between these months, we can look at the differences between the contributions made by the groups to the rate in May 2022, and the rate in June 2022. Summing the contributions to change across the 12 divisions results in the change to the annual CPIH rate between the latest two months, that is, the rise from 7.9% to 8.2%.

The rise in the annual CPIH annual rate for June 2022 was driven by upward contributions to change from 5 of the 12 divisions, with the largest contribution of 0.14 percentage points coming from transport. Within transport, the main upward effect of 0.23 percentage points came from motor fuels, partially offset by a downward contribution of 0.10 percentage points from second-hand cars.

Figure 6 shows the extent to which the different categories of goods and services have contributed to the overall annual CPIH inflation rate over the last two years. The contribution of lower-level spending categories to the annual rate depends on both the price movement in those categories as well as their weight. Contributions help to understand what is driving the inflation rate by expressing it as the additive sum of its parts. For any one month, when added together, the contributions from the 12 divisions sum to the overall CPIH inflation rate, for example 8.2% in June 2022.

The largest upward contributions to the annual CPIH inflation rate in June 2022 came from housing and household services (2.82 percentage points, principally from electricity, gas and other fuels, and owner occupiers' housing costs) and transport (1.64 percentage points, principally from motor fuels).

Contributions from these two divisions accounted for 4.46 percentage points, which is more than half of the annual CPIH inflation rate. Their combined weight comprises 42.5% of the CPIH basket.

The Consumer Prices Index (CPI) differs from the CPIH in that it does not include owner occupiers' housing costs (OOH) and Council Tax. Figure 7 shows the contribution of these components to the annual CPIH inflation rate in the context of wider housing-related costs. In June 2022, the contribution of housing and household services in total to the annual CPIH inflation rate was 2.82 percentage points, a rise of 0.03 percentage points from May. The June figure was the highest in the National Statistic series, which began in January 2006. The annual rate for the division was 8.9% in June 2022, up from 8.7% in May.

The relatively high contribution to the rate in the latest three months came mainly from electricity, gas and other fuels.

OOH's contribution to the CPIH annual inflation rate increased from 0.54 to 0.56 percentage points between May and June 2022, increasing the annual rate by 0.02 percentage points. This is a result of costs increasing by 0.3% on the month compared with a smaller rise of 0.2% a year earlier.

The contribution to the annual rate from Council Tax remained at 0.11 percentage points in June 2022, and therefore made no contribution to the change. This reflects an unchanged annual rate of 3.4%. In April 2022, a £150 non-repayable Council Tax Rebate payment was provided to all households that are liable for Council Tax in Bands A to D in England. There was also further funding available for households that need support but are not eligible, and for the devolved countries to administer to non-England households. This rebate was out of scope of CPIH and therefore not reflected in the figures.

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5. Latest movements in CPI inflation

While the Consumer Prices Index including owner occupiers' housing costs (CPIH) is our lead and most comprehensive measure of consumer price inflation, the Consumer Prices Index (CPI) is based on a harmonised methodology developed by Eurostat and allows for international comparisons to be drawn. For more information on the use cases for our consumer price inflation statistics, please refer to our Measuring changing prices and costs for consumers and households, proposed updates: March 2020 article.

Figure 8 shows the annual inflation rates for the CPI all goods and all services series, together with CPI excluding energy, food, alcohol and tobacco (often referred to as core CPI). The CPI inflation rate is added for comparison.

The CPI all goods index rose by 12.7% in the 12 months to June 2022, up from 12.4% in May. The CPI all services index rose by 5.2% in the 12 months to June 2022, up from 4.9% in May. CPI excluding energy, food, alcohol and tobacco rose by 5.8% in the 12-months to June 2022, down from 5.9% in May.

The largest movements in the annual CPI inflation rate in June 2022 came from transport and food.

Figure 9 shows how each of the main groups of goods and services contributed to the change in the annual CPI inflation rate between May and June 2022. Summing the contributions to change across the 12 divisions results in the change to the annual CPI rate between the two months, that is, the rise from 9.1% to 9.4%.

The rise in the annual CPI rate into June 2022 was driven by upward contributions to change from 5 of the 12 divisions, with the largest contribution of 0.16 percentage points coming from transport. Within transport, the main upward effect of 0.29 percentage points came from motor fuels, partially offset by a downward contribution of 0.13 percentage points from second-hand cars. Although the size of the contributions differ from CPIH, the main drivers to change are the same where they are common to both measures.

Figure 10 shows the extent to which the different categories of goods and services have contributed to the overall CPI 12-month inflation rate over the last two years. For any one month, when added together, the contributions from the 12 divisions sum to the overall CPI inflation rate, for example 9.4% in June 2022.

While the CPIH includes extra housing components not included in the CPI, the largest contributions to the annual CPI inflation rate were from the same divisions that made the largest contributions to the annual CPIH rate, namely housing and household services, and transport.

Figure 11 illustrates CPI inflation against the G7 countries that produce a comparable measure.

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6. Consumer price inflation data

Consumer price inflation tables
Dataset | Released 20 July 2022
Measures of monthly UK inflation data including the Consumer Prices Index including owner occupiers' housing costs (CPIH), Consumer Prices Index (CPI) and Retail Prices Index (RPI). These tables complement the consumer price inflation time series dataset.

Consumer price inflation time series
Dataset | Dataset ID: MM23 | Released 20 July 2022
Comprehensive database of time series covering measures of inflation data for the UK including the CPIH, CPI and RPI.

Consumer price inflation detailed briefing note
Dataset | Released 20 July 2022
The consumer price inflation detailed briefing note contains details of the items contributing to the changes in the CPIH (and RPI), details of any notable movements, a summary of the reconciliation of CPIH and RPI, and the outlook, which looks ahead to next month's release.

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7. Glossary

Annual inflation rate

The most common approach to measuring inflation is the 12-month or annual inflation rate, which compares prices for the latest month with the same month a year ago. In any given month, the annual rate is determined by the balance between upward and downward price movements of the range of goods and services included in the index.

Consumer price inflation

Consumer price inflation is the rate at which the prices of goods and services bought by households rise or fall. It is estimated by using price indices. For an overview of the indices and their uses, please see the Consumer price indices, a brief guide: 2017 article.

Consumer Prices Index including owner occupiers' housing costs (CPIH)

CPIH is the most comprehensive measure of inflation. It extends the Consumer Prices Index (CPI) to include a measure of the costs associated with owning, maintaining and living in one's own home, known as owner occupiers' housing costs (OOH), along with Council Tax. Both are significant expenses for many households and are not included in the CPI.

Consumer Prices Index

The CPI is a measure of consumer price inflation produced to international standards and in line with European regulations. The CPI is the inflation measure used in the government's target for inflation.

The CPI is produced at the same level of detail as the CPIH in the accompanying dataset and data time series.

Retail Prices Index (RPI)

RPI does not meet the required standard for designation as a National Statistic. In recognition that it continues to be widely used in contracts, we continue to publish the RPI, its subcomponents and RPI excluding mortgage interest payments (RPIX). To view the all-items RPI, please see the data time series section of the inflation and price indices area of our website. The annual RPI inflation rate was 11.8% in June 2022.

The UK Statistics Authority and HM Treasury launched a consultation in 2020 on the authority's proposal to address the shortcomings of the RPI. From 2030 (at the earliest), as outlined in the UK Statistics Authority response to the consultation, the CPIH methods and data sources will be introduced into the RPI. Additionally, the supplementary and lower-level indices of the RPI will be discontinued.

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8. Measuring the data

Transforming consumer prices statistics - questionnaire on communicating important changes

The Office for National Statistics (ONS) is undertaking a programme to transform consumer prices. This includes identifying new data sources, improving methods, and developing systems to improve the Consumer Prices Index (CPI) and the Consumer Prices Index including owner occupiers' housing costs (CPIH). Given the importance of the changes, we want to ensure that the information we provide and how we provide it, meets stakeholders' and partners' needs. This short questionnaire will take you less than 10 minutes to complete, and it will inform how best we communicate and engage on consumer price statistics transformation. We would be grateful if you could complete it by 31 August 2022.

Treatment of the energy bill package

On 3 February 2022, the UK government announced an Energy Bills Rebate package to help households to manage rising energy bills. The details of the rebate are described as follows.

  • "A £200 discount on their energy bill this Autumn for domestic electricity customers in Great Britain. This will be paid back automatically over the next 5 years.

  • A £150 non-repayable Council Tax Rebate payment for all households that are liable for Council Tax in Bands A-D in England.

  • £144 million of discretionary funding for Local Authorities to support households who need support but are not eligible for the Council Tax Rebate.

  • The devolved administrations are receiving around £715 million funding through the Barnett formula as usual where UK Government support doesn't cover Scotland, Wales or Northern Ireland."

Decisions on whether to include rebates, subsidies and discounts in our consumer price inflation statistics are not clear cut and are taken on a case-by-case basis. We aim to be consistent with the National Accounts, the Public Sector Finances, and other economic statistics. Decisions are based on international statistical guidance and practical considerations. More information on this is provided in section 9.2 of our Consumer Price Indices Technical Manual. We have previously announced that the Council Tax rebate is out of scope of the CPIH and Retail Prices Index (RPI). Council Tax is not included in the CPI.

On 26 May 2022, the UK government announced a Cost of Living Support package. Part of this package replaced the £200 discount on energy bills, the first component of the Energy Bills Rebate package. The new announcement said the following.

  • "Households will get £400 of support with their energy bills through an expansion of the Energy Bills Support Scheme.

  • As well as doubling the £200 of support announced earlier this year, the full £400 payment will now be made as a grant, which will not be recovered through higher bills in future years."

The Economic Statistics Classification assessment of this will be made when more information becomes available following publication of the government response to the Department for Business, Energy and Industrial Strategy's Energy Bills Support Scheme consultation in summer 2022. Once the classification decision has been made, we will consider whether it affects consumer price inflation statistics (CPIH, CPI and RPI) and, if so, how the treatment can be consistently incorporated into those statistics.

Consumer price inflation historical estimates, UK, 1950 to 1988

On 18 May 2022, we published our Consumer price inflation, historical estimates, UK, 1950 to 1988 - methodology. This includes new estimates of CPIH over the period, and improved estimates of CPI.

In December 2018, the ONS published an extended CPIH historical series covering the period from 1989 to 2005 in the Consumer Prices Index including owner occupiers' housing costs (CPIH) historical series: 1988 to 2004 article. This extended series is an official statistic rather than a National Statistic, reflecting the historical uncertainty around the back casts. The 1950 to 1988 estimates (published in response to user need for a longer series) are indicative, and are for analytical purposes only. They are not intended for official use and do not constitute part of the National Statistic series.

Weights for consumer price inflation statistics in 2022

In line with usual practice at the start of each year, the expenditure weights used in compiling the CPIH and CPI have been calculated using updated spending information. Normally this would be national accounts Household Final Consumption Expenditure (HFCE) data lagged by two years. However, in 2021 we made further adjustments to incorporate some of the larger changes in spending patterns seen between 2019 and 2020. More information is provided in our Coronavirus (COVID-19) and Consumer Price Inflation weights and prices: 2021 article. This approach was consistent with Eurostat's international guidance on the compilation of HICP weights in case of large changes in consumer expenditures (PDF, 135KB). The guidance stipulated that: "the expenditure shares used for the Harmonised Index of Consumer Prices (HICP) in year t should be representative of year t-1. This is in line with the overall Laspeyres philosophy of the HICP".

For this year's weights update we adopted a similar approach. We estimated a 2021 dataset by taking the most up-to-date HFCE data available (quarters 1 to 3, second estimate, available in Consumer trends, UK: July to September 2021 bulletin) and imputing the fourth quarter based on the 2019 seasonal growth. We used the same threshold as in the previous year (25%) to identify Classification of Individual Consumption by Purpose (COICOP) classes where there were large changes in spending levels between 2020 and 2021. For these classes, we replaced the usual 2020 data with the 2021 estimate. Also, this year, we gave consideration to classes below the threshold that tended to contain a larger number of basket items that were unavailable because of coronavirus lockdowns (see Table 58 of our Consumer price inflation dataset). Our approach is consistent with the latest international guidance.

The COICOP classes that have been adjusted were detailed in our Consumer price inflation, updating weights: 2022 article, alongside an explanation of the latest movements. As with last year, we made no changes to the weighting scheme for the RPI.

Making our published spreadsheets accessible

We have published sample versions of a selection of consumer price inflation tables following the Government Statistical Service (GSS) guidance on releasing statistics in spreadsheets. It is essential that we aim to improve the usability, accessibility and machine readability of our published statistics so that everyone can make use of them. We have published these one-off sample tables to help communicate the changes we will be making to the consumer price inflation tables over the coming months. When we change to the new format, there will be a period where we will publish the tables in both the new and current formats. This will be along with a mapper to help users to find the information they require in the new format tables. If you have any questions or comments on these sample tables, please email cpi@ons.gov.uk.

Coronavirus impacts

Since the start of the coronavirus pandemic, there have been challenges around our collection activities. This is because approximately 80% of the price quotes (45% by weight) for the CPIH basket are usually physically collected in stores across 141 locations in the UK. In April 2021, for example, we were unable to collect prices in store. However, we resumed in-store collections from May 2021 following the approach detailed in our Consumer price statistics: resuming a field-based price collection methodology.

The approach for resuming in-store collections was consistent with Eurostat advice, published in their Guidance note on HICP issues emerging from the lifting of lockdown measures (PDF, 388KB).

Our Coronavirus and the effects on UK prices article, describes the approach taken for imputing price movements for items that were unavailable for consumers to purchase.

Restrictions caused by the coronavirus pandemic began easing from 12 April 2021 and, since August 2021, there are no items across the CPIH basket of goods and services that are unavailable to consumers. However, the annual rate depends on prices collected in both 2022 and 2021. In June 2021, 14 items were unavailable to UK consumers. These are listed in Table 58 of the Consumer price inflation dataset.

Contributions to the change in the annual inflation rate between May and June 2022 from affected items are generally small (less than or equal to 0.01 percentage points in magnitude). In aggregate, there was a negligible effect on the change in both the CPIH and CPI annual inflation rates between May and June 2022. The contributions to the annual inflation rate in June 2022 from these items were 0.13 percentage points in CPIH and 0.11 percentage points in CPI.

Methodology information

The consumer price indices are normally based on prices collected from outlets around the country, supplemented by information collected centrally over the internet and by phone. The figures in this publication use data collected on or around 14 June 2022.

Our Consumer price indices, a brief guide article, gives an overview of consumer price statistics, while our Consumer Prices Indices Technical Manual covers the concepts and methodologies underpinning the indices in more detail.

Our CPIH Compendium provides a comprehensive source of information on the CPIH, focusing on the approach to measuring owner occupiers' housing costs.

Our Users and uses of consumer price inflation statistics methodology includes information on the users and uses of these statistics, and the characteristics of the different measures of inflation in relation to potential use.

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9. Strengths and limitations

We have illustrated our future approach to measuring changing prices and costs faced by consumers and households using three "use cases", along with how they relate to the measures currently published and those under development. We have also published proposed updates in our Measuring changing prices and costs for consumers and households, proposed updates: March 2020 article.

The three cases refer firstly to the Consumer Prices Index including owner occupiers' housing costs (CPIH) as our lead measure of inflation based on economic principles. They also refer to the Household Costs Indices (HCIs) as a set of measures to reflect the change in costs as experienced by households, and the Retail Prices Index (RPI) as a legacy measure that is required to meet existing user needs. Our Shortcomings of the RPI as a measure of inflation article describes the issues with the RPI.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Philip Gooding
cpi@ons.gov.uk
Ffôn: Consumer Price Inflation Enquiries: +44 1633 456900. Consumer Price Inflation recorded message (available after 8am on release day): +44 800 0113703