Consumer price inflation, UK: November 2021

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:
15 December 2021

Cyhoeddiad nesaf:
19 January 2022

1. Main points

  • The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 4.6% in the 12 months to November 2021, up from 3.8% in the 12 months to October.

  • The largest upward contributions to the November 2021 CPIH 12-month inflation rate came from transport (1.34 percentage points, principally from motor fuels and second-hand cars) and housing and household services (1.28 percentage points).

  • On a monthly basis, CPIH increased by 0.6% in November 2021, compared with a fall of 0.1% in November 2020.

  • The upward contributions to the change in the CPIH 12-month inflation rate between October and November 2021 were broad based, with the largest coming from transport (particularly motor fuels), and clothing and footwear.

  • These were partially offset by a large downward contribution from restaurants and hotels.

  • The Consumer Prices Index (CPI) rose by 5.1% in the 12 months to November 2021, up from 4.2% in October.

  • On a monthly basis, CPI increased by 0.7% in November 2021, compared with a fall of 0.1% in November 2020.

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2. Annual CPIH inflation rate

The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 4.6% in the 12 months to November 2021, up from 3.8% to October. The 12-month inflation rate was the highest since September 2008, when it stood at 4.8%. Inflation rates are currently influenced by the effects of the coronavirus (COVID-19) lockdowns in 2020. The Office for National Statistics’ (ONS) blog Beware Base Effects describes how relatively low prices for some items during those periods influence current inflation rates.

The Consumer Prices Index (CPI) rose by 5.1% in the 12 months to November 2021, up from 4.2% to October. This is the highest CPI 12-month inflation rate since September 2011, when it stood at 5.2%.

On a monthly basis, CPIH rose by 0.6% in November 2021, compared with a fall of 0.1% in the same month a year ago. Price rises in transport, and recreation and culture were the largest contributors to the monthly rate in November 2021. In November 2020, the main downward contribution to the monthly rate came from clothing and footwear. More information on contributions to change is provided in Section 4.

In November 2021 the CPI rose by 0.7% from the previous month, compared with a fall of 0.1% in the same month the previous year.

Given that the owner occupiers’ housing costs (OOH) component accounts for around 19% of the CPIH, it is the main driver for differences between the CPIH and CPI inflation rates.

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3. Contributions to the annual CPIH inflation rate

Figure 2 shows the extent to which the different categories of goods and services have contributed to the overall Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate over the last two years.

Transport

The contribution from transport has shown more variation than any other group over the last two years. It has ranged from a downward contribution of 0.20 percentage points in May 2020 during the first coronavirus (COVID-19) lockdown to an upward contribution of 1.34 percentage points in November 2021. This is the largest upward contribution from any division this month and the largest from transport since March 2010.

Within transport, the movements have mainly been caused by changes in the price of motor fuels. Motor fuels made a downward contribution to the 12-month rate between March 2020 and February 2021, before the contribution turned positive in March 2021 and subsequently increased to 0.58 percentage points in November 2021.

Average petrol prices stood at 145.8 pence per litre in November 2021, compared with 112.6 pence per litre a year earlier. The November 2021 price is the highest recorded. In November 2020, the government introduced tougher national restrictions in England, the tiered system of COVID-19 protection levels was introduced in Scotland, the firebreak lockdown in Wales ended but non-essential travel was still discouraged and Northern Ireland’s circuit-breaker lockdown was in force affecting various services. At that point, average petrol prices fell by 0.6 pence per litre on the month.

The contribution from second-hand cars has also changed significantly since the beginning of 2020, rising from a downward effect of 0.07 percentage points in January 2020 to an upward pull of 0.15 percentage points in October 2020. With the onset of the coronavirus pandemic, there were reports of increased demand as people sought alternatives to public transport. From October 2020, the contribution to the 12-month rate gradually fell back to an upward 0.01 percentage points in April 2021. It then rose again to 0.32 percentage points in November 2021, the largest contribution from second-hand cars since the start of the National Statistic series in January 2006.

Figure 3 shows the seasonal price movements for used cars over the last six years, setting January equal to 100 in each year. Used car prices increased by 3.1% on the month to November 2021, leading to a cumulative increase of 31.3% since April 2021. By comparison, in 2020, used car prices fell by 0.4% on the month to November, but grew by 3.5% between April and November.

These latest movements come amidst reports of increased demand as dealers opened following the most recent national lockdown, together with a global semiconductor shortage affecting the production of new cars and resulting in consumers turning to the used car market. Additionally, there are reportedly concerns in the trade about the supply of second-hand cars because of a variety of factors. These include fewer one-year-old cars coming to the market now because of a fall in new car registrations last year, and the extensions of lease contracts and fewer part exchanges caused again by delays in new-car supply. The recent Prices Economic Analysis compares the growth in second-hand car prices in the UK with the euro area and United States.

Housing and household services

The contribution from housing and household services increased from 1.23 percentage points in October 2021 to 1.28 percentage points in November, the largest contribution from this division since early 2009. The contributions in both months were significantly above those from April to September 2021 as a result of price rises for gas and electricity following the increase in the cap on energy prices, which changed on 1 October 2021. The Office of Gas and Electricity Markets (Ofgem) introduced energy price caps to limit the price energy suppliers can charge the estimated 15 million households that either use a prepayment meter or are on the “standard variable” energy (or default) tariff. As the energy regulator, Ofgem update the energy price caps twice a year, in April and October, to ensure that they reflect changes in the cost of supplying energy.

In April 2020, the energy price cap had been reduced causing a downward contribution from electricity, gas and other fuels of 0.20 percentage points. This fall was reversed in April 2021 with rises in gas and electricity prices. On 6 August 2021, Ofgem published the cap levels for the period from 1 October 2021 to 31 March 2022. They reported that the price cap had increased by 12% since April 2021 because of “a rise of over 50% in energy costs over the last six months with gas prices hitting a record high as the world emerges from lockdown”.

Combined with the April 2021 increases, these latest rises resulted in 12-month inflation rates of 18.8% for electricity and 28.1% for gas in October 2021. These rates were unchanged in November and were the highest annual rates for these classes since early 2009.

Elsewhere within housing and household services, owner occupiers’ housing costs rose 2.1% on the year to November, resulting in a contribution of 0.38 percentage points to the CPIH annual inflation rate.

Recreation and culture

During the period from April 2020 to January 2021, the largest contribution to the 12-month rate came from recreation and culture. The contribution then eased back to 0.09 percentage points in July 2021 but has since risen to 0.38 percentage points in November, the largest contribution from this division since October 2018.

Within recreation and culture, the upward contributions came from a variety of classes in November, the largest from games, toys and hobbies. Contributions from this class are subject to short-term fluctuations since prices are collected based on the composition of bestseller charts. Price movements can be large depending on changes in the composition of the charts.

Other divisions

In total, the contributions from 6 of the 12 divisions were larger in November 2021 than they had been for the previous three years. Aside from the three already described in this section, the other divisions were food and non-alcoholic beverages, clothing and footwear, and furniture and household goods. Additionally, the contribution from education was unchanged between October and November 2021, joint highest since September 2015.

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4. Contributions to change in the annual CPIH inflation rate

Figure 4 shows how each of the main groups of goods and services contributed to the change in the Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate between October and November 2021. The corresponding figures for the Consumer Prices Index (CPI) can be found in Column F of Table 26 in the Consumer price inflation dataset.

The rise in the CPIH annual rate for November 2021 was driven by upward contributions to change of 0.09 percentage points or more from 5 of the 12 divisions. These were partially offset by a large downward contribution to change from restaurants and hotels.

Transport

The largest upward contribution to the change in the CPIH 12-month inflation rate came from transport, increasing the rate by 0.27 percentage points between October and November 2021. The effect came principally from motor fuels, where prices rose by 5.1% on the month compared with falls of 0.5% a year ago, increasing the rate by 0.14 percentage points. The price of petrol rose by 7.2 pence per litre between October and November 2021, the largest monthly rise on record (since 1990). This compares with a fall of 0.6 pence per litre between the same months a year ago when further restrictions related to the coronavirus (COVID-19) pandemic were introduced.

Second-hand car prices rose this year compared with a fall a year ago, contributing 0.05 percentage points to the change in the rate. There are reports of prices rising as a result of increasing demand following the end of the most recent national lockdown and some buyers are reported to have turned to the used car market as a result of delays in the supply of new cars caused by the shortage of semiconductor chips used in their production. Additionally, there are reportedly concerns in the trade about the supply of second-hand cars because of fewer trade-ins.

There were other smaller upward contributions to change from within the division, for example, 0.02 percentage points from maintenance and repairs. Overall, prices in this class rose this year but fell a year ago, with the main upward contributions coming from roadside recovery services and car repair.

Clothing and footwear

Clothing and footwear also provided a large upward contribution (of 0.21 percentage points) to the change in the headline rate. Prices rose this year by 1.1% but fell a year ago by 2.6%. Prices usually rise between October and November, and the movement in 2021 is in line with most recent years, but price movements across 2020 were unusual and appear to have been affected by the coronavirus lockdowns. In November 2020, when there was increased discounting compared with other years, tougher national restrictions were introduced, the tiered system of COVID-19 protection levels was introduced in Scotland, the firebreak lockdown in Wales ended but non-essential travel was still discouraged and Northern Ireland’s circuit-breaker lockdown was in force affecting various services.

The upward contribution was spread across most of the detailed classes, with the largest effects coming from a broad range of women’s and men’s clothing.

Food and non-alcoholic beverages

Food and non-alcoholic beverages provided an upward contribution of 0.11 percentage points as prices rose by 1.0% this year but fell by 0.2% a year ago. There were small upward contributions from 6 of the 11 detailed classes. The largest came from sugar, jam, syrups, chocolate and confectionery, where prices of chocolate products in particular rose this year but fell a year ago.

Alcohol and tobacco

Prices of alcohol and tobacco rose by 2.6% this year, compared with a fall of 0.2% a year ago, leading to an upward contribution to change of 0.10 percentage points. The largest effect came from tobacco, where duty rates increased as announced in the Autumn 2021 Budget. There were also smaller upward contributions from spirits, wine and beer.

Recreation and culture

A large upward contribution to change between October and November 2021, of 0.09 percentage points, came from recreation and culture. Again, the movements comprised small effects across a range of classes with the largest coming from cultural services, books, and games, toys and hobbies. Some of the individual items comprising the cultural services component were unavailable in November 2020 and the indices for these items were imputed as described in Coronavirus and the effects on UK prices. This means that the current contribution to change has to be interpreted with a degree of caution.

The contribution from books came principally from paperback books, where prices rose this year but fell a year ago.

Games, toys and hobbies contained a range of offsetting effects. There was a large upward contribution from computer game downloads as prices rose this year, compared with falls a year ago. This was partially offset by small downward contributions from other items such as computer game discs. Price movements for these products can sometimes be large depending on the composition of bestseller charts.

Housing and household services

The 0.05 percentage point upward contribution from housing and housing services came principally from owner occupiers’ housing costs, which rose by 0.3% this year compared with a rise of 0.2% a year ago. Other small effects came from rents and liquid fuels used for domestic heating.

Restaurants and hotels

The largest, partially offsetting, downward contribution (of 0.09 percentage points) to the change in the CPIH 12-month rate came from restaurants and hotels, where prices fell by 0.3% this year but were estimated to have risen by 0.7% a year ago. The effect came principally from accommodation services and, to a lesser extent, from restaurants and cafes. There was a partially offsetting upward contribution from canteens. As a result of lockdowns and other restrictions in place during November 2020, the price movements for many items in the restaurants and hotels category were imputed in that month as outlined in Coronavirus and the effects on UK prices.

Unavailable items

For items that were unavailable in line with government guidelines in the early part of 2021, there were no January base prices. As these items became available again, base prices were imputed in line with the procedures described in Coronavirus (COVID-19) and Consumer Price Inflation weights and prices: 2021.

For the first month in which they became available again, item indices were imputed using either the monthly movement in the all-available-items index or, for a smaller number of seasonal items, the annual movement in the all-available-items index. The aim was that the indices for returning items had a negligible impact on the all-items inflation rate in the first month of return, reflecting the fact that these services were available only as price levels and did not have price growth associated with them (relative to the January base). Collected prices then started to influence the index in the following month.

Restrictions 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 12-month rate depends on prices collected in both 2021 and 2020. In November 2020, tougher national restrictions were introduced in England, the tiered system of COVID-19 protection levels was introduced in Scotland, the firebreak lockdown in Wales ended but non-essential travel was still discouraged and Northern Ireland’s circuit-breaker lockdown was in force affecting various services. This led to the number of CPIH items that were unavailable to UK consumers rising to 72 from 8 in October 2020. The changes to the list across months, are shown in Table 58 in the Consumer price inflation dataset.

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5. Owner occupiers’ housing costs

Figure 5 shows the contribution of owner occupiers’ housing costs (OOH) and Council Tax to the Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate in the context of wider housing-related costs. In November 2021, the contribution of housing and household services to the CPIH 12-month inflation rate was 1.28 percentage points, an increase of 0.05 percentage points from October 2021.

There have been only relatively small changes to the contributions from individual components between October and November 2021. This follows larger changes to gas and electricity prices in October when the Office of Gas and Electricity Markets’ (Ofgem’s) changed price cap (introduced on 1 October 2021) came into effect.

OOH’s contribution to the CPIH annual inflation rate increased from 0.35 percentage points to 0.38 percentage points between October and November 2021, increasing the rate by 0.03 percentage points. The contribution to the annual rate from Council Tax remained at 0.13 percentage points, and therefore made no contribution to the change.

The large contribution from electricity, gas and other fuels in November 2021 makes this group the largest current contributor within housing and household services. From July 2019 to September 2021, OOH was the largest upward contributor to the annual rate in the division. However, there were downward contributions on a similar scale from electricity, gas and other fuels over much of 2020 and the first quarter of 2021, reflecting reductions in the energy price cap at the time.

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6. Consumer price inflation data

Consumer price inflation tables
Dataset | Released 15 December 2021
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 15 December 2021
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 15 December 2021
Background briefing to the statistical bulletin.

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7. Glossary

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. Consumer price indices, a brief guide gives an overview of the indices and their uses.

12-month 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 12-month rate is determined by the balance between upward and downward price movements of the range of goods and services included in the index.

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 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 and 12-month inflation rate, please see the data time series section of the inflation and price indices area of our website.

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 response to the consultation, the CPIH methods and data sources will be introduced into the RPI, and the supplementary and lower-level indices of the RPI will be discontinued.

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8. Measuring the data

Economic statistics governance after EU exit

Following the UK’s exit from the EU, new governance arrangements are being put in place that will support the adoption and implementation of high-quality standards for UK economic statistics. These governance arrangements will promote international comparability and add to the credibility and independence of the UK’s statistical system.

At the centre of this new governance framework will be the new National Statistician’s Committee for Advice on Standards for Economic Statistics (NSCASE). NSCASE will support the UK by ensuring its processes for influencing and adopting international statistical standards are world leading. The advice NSCASE provides to the National Statistician will span the full range of domains in economic statistics, including the National Accounts, fiscal statistics, prices, trade and the balance of payments and labour market statistics.

Discontinuing the production of CPIH(Y) and CPI-CT

We plan to discontinue production of the Consumer Prices Index including owner occupiers’ housing costs excluding indirect taxes (CPIHY) and Consumer Prices Index at constant tax (CPI-CT). Few users have been identified for the former while the latter was used principally by Eurostat, the European statistical office, when the UK was part of the EU. Subject to views received, these series will be produced for the last time with the December data published on 19 January 2022. If you have any concerns, please email cpi@ons.gov.uk.

Making our published spreadsheets accessible

We have published sample versions of a selection of consumer price inflation tables prepared 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 the current formats, 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.

Consultation on the Code of Practice for Statistics – proposed change to 9.30am release practice

On behalf of the UK Statistics Authority, the Office for Statistics Regulation (OSR) is conducting a consultation on the Code of Practice for Statistics - proposed change to 9.30am release practice. Please send comments by 21 December 2021 to regulation@statistics.gov.uk.

Coronavirus

Since the start of the coronavirus (COVID-19) pandemic, there have been challenges around our collection activities, as approximately 80% of the price quotes (45% by weight) for the Consumer Prices Index including owner occupiers’ housing costs (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 Consumer price statistics: resuming a field-based price collection. For November 2021, our price collectors were able to complete full collections in 103 of the locations with partial collections in the other 38, supplementing the latter by continuing to collect prices over the internet, by phone and by email.

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

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

Coronavirus supplementary analysis

In March 2021, we published Effect of reweighting the consumer prices basket during the coronavirus (COVID-19) pandemic: October to December 2020, which contains Experimental statistics for both CPIH and the Consumer Prices Index (CPI). By linking the price changes between the latest month and the previous one on to the old series (a process called ”chain-linking”), we are able to change our expenditure weights each month to remove any unavailable items and adjust the weight of remaining items according to our best available evidence of consumption patterns.

Pre-release access

The Bank of England was granted exceptional pre-release access to an estimate of consumer price inflation data at 12:30pm on Friday 10 December 2021 so that the data were available for the Monetary Policy Committee meeting held on that day. The letters requesting and agreeing to pre-release are available at Exchange of letters between the ONS, Bank of England and HM Revenue and Customs for exceptional pre-release access 2021.

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. As a result of the coronavirus pandemic, we collected all prices centrally in April 2021, but our price collectors have resumed in-store collections from May 2021.

The figures in this publication use data collected on or around 9 November 2021.

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

The CPIH Compendium provides a comprehensive source of information on the CPIH, focusing on the approach to measuring owner occupiers’ housing costs (OOH).

Users and uses of consumer price inflation statistics 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 Measuring changing prices and costs for consumers and households, proposed updates: March 2020.

The three cases refer to the Consumer Prices Index including owner occupiers’ housing costs (CPIH) as our lead measure of inflation based on economic principles, 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. Shortcomings of the RPI as a measure of inflation 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 8:00 on release day): +44 800 011 3703