Consumer price inflation, UK: January 2024

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

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Cyswllt:
Email David Beckett

Dyddiad y datganiad:
14 February 2024

Cyhoeddiad nesaf:
20 March 2024

1. Main points

  • The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 4.2% in the 12 months to January 2024, the same rate as in December 2023.

  • On a monthly basis, CPIH fell by 0.4% in January 2024, the same rate as in January 2023.

  • The Consumer Prices Index (CPI) rose by 4.0% in the 12 months to January 2024, the same rate as in December 2023.

  • On a monthly basis, CPI fell by 0.6% in January 2024, the same rate as in January 2023.

  • The largest upward contribution to the monthly change in both CPIH and CPI annual rates came from housing and household services (principally higher gas and electricity charges), while the largest downward contribution came from furniture and household goods, and food and non-alcoholic beverages.

  • Core CPIH (excluding energy, food, alcohol and tobacco) rose by 5.1% in the 12 months to January 2024, down from 5.2% in December 2023; the CPIH goods annual rate slowed from 1.9% to 1.8%, while the CPIH services annual rate rose from 6.0% to 6.1%.

  • Core CPI (excluding energy, food, alcohol and tobacco) rose by 5.1% in the 12 months to January 2024, the same rate as in December 2023; the CPI goods annual rate slowed from 1.9% to 1.8%, while the CPI services annual rate increased from 6.4% to 6.5%.

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2. Consumer price inflation rates

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 4.2% in the 12 months to January 2024, the same rate as in December 2023, and down from a recent peak of 9.6% in October 2022.

Our indicative modelled consumer price inflation estimates suggest that the October 2022 inflation rate was the highest in over 40 years (the CPIH National Statistic series begins in January 2006). The annual rate in December 2023 was the joint lowest since October 2021.

The unchanged annual rate between December 2023 and January 2024 was a result of prices falling by 0.4% on the month, the same rate as it was between December and January a year earlier.

The owner occupiers' housing costs (OOH) component of CPIH rose by 5.4% in the 12 months to January 2024, up from 5.3% in December 2023. OOH costs rose by 0.4% on the month, the same rate as it was between December and January a year earlier.

The Consumer Prices Index (CPI) rose by 4.0% in the 12 months to January 2024, the same rate as in December 2023, and down from a recent peak of 11.1% in October 2022. Our indicative modelled consumer price inflation estimates suggest that the October 2022 peak was the highest rate in over 40 years (the CPI National Statistic series begins in January 1997).

The unchanged annual rate between December 2023 and January 2024 was a result of prices falling by 0.6% on the month, the same rate as it was between December and January a year earlier.

The main drivers of the annual inflation rate for CPIH and CPI are the same in the majority of cases where they are common to both measures. However, the OOH component accounts for roughly 16% of the CPIH, and is the main driver for differences between the CPIH and CPI inflation rates. This makes CPIH our most comprehensive measure of inflation. We cover this in more detail in Section 4: Latest movements in CPIH inflation, and provide a commentary on the CPI in Section 5: Latest movements in CPI inflation. We also cover both CPIH and CPI in Section 3: Notable movements in prices, though the figures reflect CPIH.

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3. Notable movements in prices

The identical Consumer Prices Index including owner occupiers' housing costs (CPIH) annual inflation rates in December 2023 and January 2024 reflected offsetting price movements in the "basket of goods and services". More information about the "basket of goods and services" is available in our Consumer price inflation basket of goods and services: 2023 article.

There were downward contributions from five divisions (most notably furniture and household goods, and food and non-alcoholic beverages). There were also upward contributions from three divisions (most notably housing and household services, and transport).

Furniture and household goods

Prices in the furniture and household goods division rose by 0.5% in the year to January 2024, compared with a rise of 2.5% in the year to December 2023. Prices fell by 3.1% between December 2023 and January 2024, compared with a fall of 1.1% between the same two months a year ago.

The decrease in the annual rate was mainly the result of downward effects from furniture and furnishings, where prices fell by 5.2% on the month, the largest monthly fall since January 2020. Some of the items that contributed larger downward effects were kitchen base and wall units, leather settees, and dining tables and chairs.

Carpets and other floor coverings also provided a downward contribution because of the effect from tufted carpets and from floor rugs. Other items in this division that provided significant downward contributions were vacuum cleaners, fridge freezers, cleaning and maintenance products, and small tool accessories.

Food and non-alcoholic beverages

The annual rate of food and non-alcoholic beverages has fallen from 8.0% in December 2023 to 7.0% in January 2024, which is the lowest annual rate since April 2022. The fall to 7.0% means the annual rate has eased for the 10th consecutive month, from a recent high of 19.2% in March 2023, which was the highest annual rate seen for over 45 years.

Monthly prices for food and non-alcoholic beverage fell by 0.4% between December 2023 and January 2024, compared with a rise of 0.6% a year ago. Monthly prices for food (excluding non-alcoholic beverages) also fell by 0.4%. This was the first fall in monthly prices since September 2021, and the largest fall since July 2021.

The easing in the annual rate for food and non-alcoholic beverages was driven by "bread and cereals", where prices fell by 1.3% on the month, compared with a rise of 0.2% a year ago. The monthly fall was the largest since May 2021; some of the items providing larger negative contributions in this class were cream crackers, sponge cake, and chocolate biscuits.

Although the "bread and cereals" class provided the largest negative contribution, the slowing in the annual rate was fairly widespread across the division. Of the 11 classes, 7 provided a downward contribution, while the others were unchanged. The items that provided larger negative contributions include potato crisps, cooking sauces, and instant coffee. 

Although the annual inflation rate for food has been slowing, food prices are still high following relatively sharp rises over the latest two years. The overall price of food and non-alcoholic beverages rose by around 25% over the two years between January 2022 and January 2024. This compares with a rise of around 10% over the preceding 10 years.

Housing and household services

The annual inflation rate for housing, water, electricity, gas, and other fuels was 2.5% in January 2024, up from 1.9% in December 2023. The main upward contribution came from gas, which rose by 6.8% on the month compared to a monthly rise of 0.3% last year. This led to the annual rate of gas falling by 26.5% in January 2024 compared with a fall of 31.0% in December 2023.

There was also a strong upward contribution from electricity, which rose by 4.0% on the month, compared with a monthly rise of 1.2% last year. This led to the annual rate of electricity falling by 13.0% in January 2023, compared with a fall of 15.4% in December 2023.

The rise in each category is largely because of the increase in the Office of Gas and Electricity Market (Ofgem) price cap in January 2024.

The price of electricity, gas, and other fuels in January 2024 is 18% lower than at its peak in January 2023. However, the price in January 2024 is 89% higher than it was in January 2021.

Transport

Prices in the transport division fell by 0.5% in the year to January 2024, compared with a fall of 1.3% in December 2023. Transport prices fell by 2.8% on the month to January 2024, compared with a monthly fall of 3.6% a year ago.

The reduction in the pace of decline in the annual rate was mainly the result of second-hand cars, with motor fuels also providing a strong upward contribution. However, these were partly offset by a strong downward contribution from air fares.

Prices of second-hand cars rose by 1.5% between December 2023 and January 2024, compared with a fall of 1.2% between the same two months last year. This was the first monthly rise in second-hand car prices since May 2023. The fall in the annual rate of 5.9% in January 2024 is a reduction in the pace of decline from the 8.4% fall in the year to December 2023.

The average price of petrol fell by 2.9 pence per litre between December 2023 and January 2024, to stand at 139.9 pence per litre, down from 149.4 pence per litre in January 2023. Diesel prices fell by 3.1 pence per litre this year, to stand at 148.3 pence per litre, down from 172.1 pence per litre in January 2023.

These movements resulted in overall motor fuel prices falling by 9.2% in the year to January 2024, compared with a fall of 10.8% in the year to December 2023.

Air fares fell as usual between December 2023 and January 2024, falling by 38.9%, compared with 41.7% a year ago. However, because the weight for this subclass increased between 2023 and 2024, this amplified the impact of the January 2024 monthly movement on the headline, resulting in a negative contribution to the change in annual consumer price inflation. The annual rate for air fares was 5.8% in January 2024, up from 0.8% in December 2023.

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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 core CPIH annual inflation rate was 5.1% in January 2024, down from 5.2% in December 2023. This is the lowest rate since March 2022, when it was also 5.1%. It is down from a recent high of 6.5% in May 2023, which was the highest rate since November 1991, when it was also 6.5% in the constructed historical series.

The CPIH all goods index rose by 1.8% in the 12 months to January 2024, down from 1.9% in December, and the lowest rate since April 2021. The slowing in the rate has been caused principally by a downward contribution to the change from processed food and non-alcoholic beverages.

The CPIH all services index rose by 6.1% in the 12 months to January 2024, up from 6.0% in December 2023. The largest upward contribution to the change came from housing services, which consists of actual rents, owner occupiers' housing costs, services for maintenance and repair of dwellings, sewerage collection, house contents insurance, repair of household appliances, council tax, and domestic and household services.

Figure 5 shows how each of the main groups of goods and services contributed to the change in the annual CPIH inflation rate between December 2023 and January 2024. To understand what has changed the inflation rate between these months, we can look at the differences between the contributions each of the 12 divisions made to the rate in December 2023, and the rate in January 2024. These differences sum to the change in the annual CPIH rate between the latest two months. This month, the differences sum to zero as the rate has remained at 4.2%.

The identical rates in December 2023 and January 2024 reflected downward contributions from five divisions, which were offset by upward contributions from three divisions.

Figure 6 shows how the distinct categories of goods and services have contributed to the overall annual CPIH inflation rate over the last two years. The contribution of each category to the annual rate depends on the price movement in that category, as well as its weight, which is updated annually. Contributions help to explain 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, 4.2% in January 2024.

The largest upward contributions to the annual CPIH inflation rate in January 2024 came from restaurants and hotels, and housing and household services. At 0.79 percentage points, the contribution from restaurants and hotels was the largest of all categories for the second month in a row. The contribution from housing and household services rose slightly, from 0.58 percentage points in December 2023 to 0.75 percentage points in January 2024.

Transport provided the only negative contribution (0.06 percentage points) to the annual CPIH inflation rate, while the contribution from furniture and household goods was the lowest since February 2021, where it was also 0.04 percentage points.

Figure 7 shows the contribution of owner occupiers' housing (OOH) costs and Council Tax to the annual CPIH inflation rate in the context of wider housing-related costs. The Consumer Prices Index (CPI) differs from the CPIH in that it does not include these two components.

OOH's contribution of 0.86 percentage points was the highest since at least January 2006, while the contribution from electricity, gas, and other fuels was negative for the fourth month in a row. The contribution from housing and household services overall was 0.75 percentage points in January 2024, up from 0.58 percentage points in December 2023.

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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: December 2023 article.

Figure 8 shows CPI inflation against the EU and Group of Seven (G7) countries that produce a comparable measure. Further information on international comparisons can be found in our Food and energy price inflation, UK: 2023 article, released on 23 May 2023.

Figure 9 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).

Annual core CPI rose by 5.1% in the year to January 2024, the same rate as in November 2023 and December 2023, and down from a recent high of 7.1% in May 2023, which was the highest recorded since March 1992. The CPI all goods index rose by 1.8% in the year to January 2024, down from 1.9% in December 2023. The CPI all services index rose by 6.5% in the year to January 2024, up from 6.4% in December 2023 and down from 7.4% in July 2023, which was the joint highest rate (with May 2023) since March 1992.

As with the all-items annual inflation rates, the drivers of CPIH and CPI goods and services inflation are the same (with the exception of owner occupiers' housing costs and Council Tax, which are excluded from CPI). The drivers are discussed in more detail in Section 4: Latest movements in CPIH inflation.

Figure 10 shows how each of the main groups of goods and services contributed to the change in the annual CPI inflation rate between December 2023 and January 2024.

The identical rates in December 2023 and January 2024 reflected downward contributions from six divisions, which were offset by upward contributions from four divisions.

Although the sizes of the contributions differ from CPIH, the main drivers to the change are the same where they are common to both measures on the assumption there has been no weights effect from year to year.

Figure 11 shows how the distinct categories of goods and services have contributed to the overall annual CPI inflation rate over the last two years.

The CPIH includes extra housing components not included in the CPI. This can result in the largest contributions to the annual CPI and CPIH inflation rates coming from different divisions such as in January 2024, when the largest-contributing divisions were restaurants and hotels (with a contribution of 0.96 percentage points to the CPI annual rate) and other goods and services (with a contribution of 0.87 percentage points).

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6. Consumer price inflation data

Consumer price inflation tables
Dataset | Released 14 February 2024
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 MM23 | Released 14 February 2024
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 14 February 2024
The consumer price inflation detailed briefing note contains details of the items contributing to the changes in the CPIH, 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 range of indices available and their uses, please see Consumer price indices, a brief guide: 2017 and our Measuring changing prices and costs for consumers and households: December 2023 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 (CPI)

The CPI is a measure of consumer price inflation produced to international standards and is based on European regulations for the Harmonised Index of Consumer Prices. 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 our accompanying dataset and accompanying data time series.

Retail Prices Index (RPI)

The 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 4.9% in January 2024.

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

Weights for 2023 and 2024 consumer price inflation statistics

In line with usual practice at the start of each year, the expenditure weights used in compiling the Consumer Prices Index including owner occupiers' housing costs (CPIH) and the Consumer Prices Index (CPI) are calculated using updated spending information.

Normally, this would be national accounts household final consumption expenditure (HHFCE) data lagged by two years. However, because of the unprecedented events of the last few years and the larger changes seen in spending patterns in 2021, 2022 and 2023, we adjusted the data so that the resulting weights were more reflective of the year immediately before use in consumer price inflation. More information is available in our Consumer price inflation, updating weights articles.

Since the final coronavirus (COVID-19) lockdown occurred in 2021, we have now reverted to our standard methodology and use unadjusted data reflecting spending in 2022 to produce the 2024 CPIH and CPI weights. The weights for the Retail Prices Index (RPI) were not adjusted for changed spending patterns in 2021 to 2023 and will not be adjusted for 2024.

The weights used to produce the CPI and CPIH have historically been rounded to integers as parts per thousand of the all items indices at the class level (4-digit COICOP). For 2024, we now use unrounded weights in compiling the indices. The RPI will continue to be based on integer weights.

Households and the cost of living

To assist individuals in understanding how the rise in inflation affects their expenditure, we have produced a personal inflation calculator. The calculator allows users to enter the amount they spend across either a reduced or a wide range of categories, to produce an estimate of their personal inflation based on those spending patterns.

Our shopping prices comparison tool shows how the average prices of items have changed over time. As a result, the number of average price series in Table 55 in our Consumer price inflation dataset has been reduced to two, covering petrol and diesel, and Table 54 has been discontinued. The average price data originally presented in these tables are currently still available as time series on our website and can be found using the four-character identifiers in Table 55.

Update on the Household Costs Indices and CPIH-consistent subgroups, UK

On 4 December 2023, we published our experimental Household Costs Indices (HCIs) for UK household groups on a quarterly basis for the first time. This included new estimates for the period from January 2022 to September 2023, and revised estimates from 2007 to 2021.

The HCIs reflect how different types of households experience changing prices, and differ from CPIH and CPI, which are based on recognised economic principles and which provide an aggregate measure of inflation for household spending in the UK.

We have previously published CPIH and CPI-consistent inflation rate estimates for UK household groups. However, the quarterly publication of HCIs will now better support users' understanding of how rising prices and the cost of living affect different types of households, reflecting their unique role in our range of consumer price inflation measures. CPIH and CPI-consistent subgroup estimates will therefore be discontinued.

Alternative data sources

We are undertaking a programme of transformation across our price statistics, including identifying new sources, improving methods, and developing systems. More information about the project and our ongoing transformation plans can be found in our updated Research and developments in the transformation of UK consumer price statistics article, released on 1 December 2023. The latest release includes information on the transformation of consumer price statistics on second-hand cars and private rents, which we plan to introduce in March 2024, and our proposed approach to outlier detection in grocery scanner data.

As usual, we welcome your feedback on our work by email to cpi@ons.gov.uk.

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 and Consumer price inflation, historical estimates and recent trends, UK: 1950 to 2022 article. These include new estimates of CPIH and improved estimates of CPI for the period 1950 to 1988. These 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.

Previously, in December 2018, we published our Consumer Prices Index including owner occupiers' housing costs (CPIH) historical series: 1988 to 2004 article. This series is an official statistic rather than a National Statistic, reflecting the historical uncertainty around the backcasts.

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 9 January 2024.

Our Consumer price indices, a brief guide 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: July 2018 update 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 illustrated our approach to Measuring changing prices and costs for consumers and households in March 2018, using three "use cases", along with how they relate to the measures published and under development. We have also published updates, most recently in our Measuring changing prices and costs for consumers and households: December 2023 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 that reflect the change in costs and prices experienced by different 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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11. Cite this statistical bulletin

Office for National Statistics (ONS), released 14 February 2024, ONS website, statistical bulletin, Consumer price inflation, UK: January 2024

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Manylion cyswllt ar gyfer y Bwletin ystadegol

David Beckett
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.