Consumer price inflation, UK: October 2020

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

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Cyswllt:
Email Andy King

Dyddiad y datganiad:
18 November 2020

Cyhoeddiad nesaf:
16 December 2020

1. Main points

  • The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 0.9% in October 2020, up from 0.7% in September 2020.
  • The largest contribution to the CPIH 12-month inflation rate in October 2020 came from recreation and culture (0.26 percentage points).
  • Clothing; food; and furniture, furnishings and carpets made the largest upward contributions (with the contribution from these three groups totalling 0.16 percentage points) to the change in the CPIH 12-month inflation rate between September and October 2020.
  • These were partially offset by downward contributions of 0.06 and 0.04 percentage points, respectively, from the recreation and culture, and transport groups.
  • Eight CPIH items were unavailable to UK consumers in October, unchanged from September and accounting for 1.1% of the CPIH basket by weight; for October, we collected a weighted total of 90.0% of comparable coverage collected previously (excluding unavailable items).
  • The Consumer Prices Index (CPI) 12-month rate was 0.7% in October 2020, up from 0.5% in September.
  • The Office for National Statistics (ONS) has released a public statement on the coronavirus (COVID-19) and the production of statistics; Section 8: Measuring the data describes the situation in relation to consumer price statistics.
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2. CPIH 12-month inflation rate

The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 0.9% in October 2020, up from 0.7% in September 2020.

The Consumer Prices Index (CPI) 12-month inflation rate was 0.7% in October 2020, up from 0.5% in September.

The CPIH and CPI one-month inflation rate were both unchanged between September and October 2020, compared with falls of 0.1% and 0.2%, respectively, between the same two months of 2019.

Given that the owner occupiers’ housing costs (OOH) component accounts for around 16% 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 CPIH 12-month 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.

The increase in the CPIH 12-month inflation rate can mainly be attributed to changes in both the clothing and footwear, and the food and non-alcoholic beverages groups, between September and October 2020. In October, the restaurants and hotels group was the only CPIH group having a downward contribution to the CPIH 12-month inflation rate as the impact of the temporary reduction to Value Added Tax (VAT) continues to affect their contribution.

Since September 2018, clothing and footwear has been more likely to have a downward contribution to the headline inflation rate. Ordinarily, prices for clothing and footwear follow a clear seasonal pattern with large falls each year between June and July with items being placed on sale in preparation for the arrival of autumn product ranges. Prices then tend to rise until further sales towards the end of the year.

Throughout 2020, we have seen clothing and footwear prices follow a different pattern compared with previous years, as we recorded increased discounting during March and April, probably in response to the lockdown. Following a smaller increase between July and August this year, prices have increased at a similar rate to last year, until October when prices rose by more than a year ago.

The small downward contribution to the CPIH 12-month inflation rate from food and non-alcoholic beverages in September 2020 was the first negative contribution from this group since January 2017. Between September and October 2020, food prices have risen, but fell between the same two months a year ago, resulting in an upwards contribution of 0.05 percentage points. Most of the increase in contribution came from vegetables (including potatoes and tubers), and fruit.

During the last two years, the contribution from transport has shown more variation than any other group, ranging from an upward contribution of 0.75 percentage points in August 2018 to a downward contribution of 0.20 percentage points in May 2020. Much of the movement comes from changes in the price of motor fuels, especially during the coronavirus (COVID-19) pandemic, though contributions from air fares and second-hand cars have also changed noticeably over the period.

This month, the upward contribution from transport increased to 0.16 percentage points, from 0.12 percentage points in September. Within transport, the purchase of second-hand cars contributed 0.03 percentage points, where prices continue to be boosted by increased demand as people look to reduce their reliance on public transport.

The group’s overall contribution also increased because of operation of personal transport equipment (including fuels and lubricants, which had an upward contribution of 0.01 percentage points) having less of a downward contribution. Average petrol and diesel prices both fell by 0.1 pence per litre between September and October 2020, to stand at 113.2 and 118.1 pence per litre, respectively. Both petrol and diesel prices stood below the 126.5 and 131.4 pence per litre, respectively, recorded in October 2019. However, larger falls in coach fares, between September and October 2020 compared with a year ago, saw the contribution from transport services fall by 0.01 percentage points.

Over the last 10 years, the largest contribution to the annual CPIH inflation rate came from either housing and household services or transport. However, this changed in April 2020 because of a combination of reduced household utility bills and falling motor fuel prices. Since then, the largest contribution has come from recreation and culture. The contribution from this group increased between March and April 2020 (to stand at 0.31 percentage points), when prices for data-processing equipment, computer games, games consoles and children’s toys rose – unlike the March to April falls observed in recent years – partly as a result of the restrictions caused by the coronavirus pandemic.

The contribution from recreation and culture has fluctuated since then, partly dependent on price movements for computer games and consoles both in 2020 and the equivalent months in 2019. In October 2020, the contribution from recreation and culture fell to 0.26 percentage points, a decrease of 0.06 percentage points from September.

Between November 2018 and March 2020, the largest upward contribution to the CPIH inflation rate came from housing and household services. However, this group’s contribution fell from 0.51 percentage points in March 2020 to 0.16 percentage points in April, predominantly because of the introduction of the April 2020 Office of Gas and Electricity Markets (Ofgem) energy price cap.

Despite the contribution from housing and household services rising gradually to 0.20 percentage points in August, the group’s contribution fell to 0.16 percentage points in October. Prices for gas and electricity fell by 12.3% and 3.2%, respectively, between September and October 2020 as a result of the response from energy providers to Ofgem’s latest six-month energy price cap, which came into effect from 1 October 2020. Gas and electricity prices had both fallen by less (8.7% for gas and 2.2% for electricity) between the same two months a year ago.

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4. Contributions to change in the CPIH 12-month inflation rate

Figure 3 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 September and October 2020. The corresponding figures for the Consumer Prices Index (CPI) can be found in column F of Table 26 in the Consumer price inflation dataset.

There were upward contributions to the change in the CPIH 12-month inflation rate, totalling 0.24 percentage points, across eight CPIH divisions. These were partially offset by downward contributions, totalling 0.10 percentage points across the remaining four divisions.

The largest upward contribution (of 0.07 percentage points) to the change in the CPIH 12-month inflation rate, between September and October 2020, came from clothing and footwear. Clothing prices overall rose by 2.8% between September and October 2020, compared with a smaller increase of 0.9% between the same two months a year ago. Most of the upward contribution (0.05 percentage points) came from women’s wear. There were further smaller upward contributions of 0.02 and 0.01 percentage points from men’s and children’s wear, respectively.

These upward movements were partially offset by a small downward movement from footwear including repairs, where principally the price for high-heeled shoes fell this year, compared with an increase a year ago.

Across food and non-alcoholic beverages, all the upward contribution (of 0.05 percentage points) came from food prices, which rose by 0.1% between September and October 2020, compared with a fall of 0.6% between the same two months a year ago. The largest upward contributions came from vegetables (including potatoes and tubers), and fruit.

There was a further large upward contribution (of 0.04 percentage points) to the change in the CPIH 12-month inflation rate between September and October from furniture, household equipment and maintenance. Prices overall fell by 0.4% between September and October this year, compared with a larger fall of 1.1% between the same two months a year ago.

There were upward contributions across the broad group, especially from furniture, furnishings and carpets; household textiles; and glassware, tableware and household utensils. These were partially offset by a small downward contribution (of 0.01 percentage points) from household appliances, fitting and repairs, where prices overall fell this year but rose a year ago.

There was a small upward contribution of 0.03 percentage points from the transport group. The largest upward contribution came from the purchase of vehicles, where prices for second-hand cars have risen by 1.4% between September and October 2020, compared with a 0.2% fall between the same two months a year ago. This upward movement continues from last month, which is reported to be because of increased demand for used cars as people seek alternatives to public transport.

There was a further small upward contribution from operation of personal transport equipment. The upward contribution (of 0.01 percentage points) from fuels and lubricants came from prices falling by less than a year ago. Petrol and diesel prices both fell by 0.1 pence per litre between September and October 2020, to stand at 113.2 and 118.1 pence per litre, respectively.

In comparison, between September and October 2019, petrol and diesel prices fell by 0.8 and 0.4 pence per litre, to stand at 126.5 and 131.4 pence per litre, respectively. There were further small upward contributions from maintenance and repairs, and other services, where prices for both groups rose this year by more than a year ago.

There was a small, partially offsetting downward movement from transport services, in particular from coach fares. Coach fares fell in price by 14.4% between September and October 2020, compared with a smaller fall of 5.9% between the same two months a year ago. Despite prices falling from a seasonal peak in August, coach fares remain substantially higher than at the start of year, which is likely to be the result of reduced demand or operating reduced services during the ongoing pandemic.

The largest downward contribution (of 0.06 percentage points) came from recreation and culture. Prices, overall, were unchanged between September and October 2020, compared with an increase of 0.4% between the same two months a year ago.

Within this product group, the main downward contributions came from package holidays (0.04 percentage points); audiovisual equipment and related products (0.03 percentage points); and cultural services (0.02 percentage points). Prices for package holidays fell by 0.5% between September and October 2020, compared with a 0.6% rise between the same two months a year ago. This is likely to reflect reduced demand for foreign holidays.

For audiovisual equipment and related products, the downward contributions came from PC peripherals, where we have observed stock shortages, particularly for printers and web cameras, since April, which may have affected prices; and CDs. Finally, the downward movement from cultural services came entirely from cinema admission, where tickets have been discounted in part because of a reduced number of new cinema releases.

There was a partially offsetting small upward contribution from games, toys and hobbies, where overall computer games contributed 0.03 percentage points to the change in the CPIH 12-month inflation rate. The largest upward movement came from computer game downloads, which increased in price between September and October this year by more than a year ago.

This month’s collection featured several newly released games reflecting the release of new titles ahead of Christmas, although these releases seem to have been delayed by a month when compared with 2019. There was a further small upward contribution (of 0.01 percentage points) from computer games consoles, where price fell by less than a year ago.

The second largest downward contribution (of 0.04 percentage points) to the change in the CPIH 12-month inflation rate came from housing and household services. This can be fully attributed to gas and electricity prices, which fell by 12.3% and 3.2%, respectively, between September and October 2020.

This month’s downward movement partially reflected the response from energy providers to the Office of Gas and Electricity Markets’ (Ofgem’s) six-month energy price cap (PDF, 355KB), which came into effect from 1 October 2020. The main driver for this fall is reduced wholesale energy costs, particularly for gas, with global energy prices falling amid decreased demand during the pandemic. Gas and electricity prices fell by 8.7% and 2.2%, respectively, between the same two months a year ago.

The number of CPIH items that were unavailable to UK consumers in October remained at eight. These items made no overall contribution to the change in the CPIH 12-month inflation rate. None of the imputed items individually made a significant contribution to the change in the rate.

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5. Owner occupiers’ housing costs

Figure 4 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 April 2020, the contribution of housing components to the CPIH 12-month inflation rate fell to its lowest level (0.16 percentage points) since November 2010. The fall in contribution in April 2020 was the result of reduced contributions from electricity, gas, liquid fuels, water supply and sewerage collection. In October 2020, despite a small increase to the contribution over the last six months, the contribution of housing components fell back to 0.16 percentage points as a result of a reduced contribution from gas and electricity, where prices fell this year by more than a year ago.

Looking across a longer timeframe, the contribution from OOH had been on a downward trend from a high in October 2016. However, it has stabilised since early 2018 and made the largest contribution to the CPIH 12-month inflation rate from all the housing and household services categories throughout most of 2019 and into 2020. The measurement of OOH uses the rent paid for an equivalent house as a proxy for the costs faced by an owner occupier. It includes the rents paid for all lets, not just new lets, so that changes in rents take longer to feed through than in the case of measures based on new lets only.

Electricity, gas and other fuels made a negative contribution during 2015 and 2016, but subsequent rises, most notably in electricity prices, saw the contribution turn positive through 2017 and into 2018. Further electricity and gas price rises in summer and autumn 2018 increased their contribution to the CPIH 12-month rate.

The introduction of the Office of Gas and Electricity Markets’ (Ofgem’s) initial energy price cap resulted in reduced contributions to the CPIH 12-month inflation rate for January to March 2019. However, the contribution increased in April 2019 as energy providers responded to Ofgem’s subsequent raising of the price cap.

There was a negative contribution from electricity, gas and other fuels between October and December 2019, before the price reductions in January 2019 unwound leading to an upward contribution from January 2020. However, the introduction of the April 2020 Ofgem price cap resulted in a further negative contribution as prices of electricity rose slightly (by 0.2% on the month) and gas prices fell by 3.5%, compared with larger electricity and gas price rises of 10.9% and 9.3% respectively in April 2019.

The latest energy price cap (PDF, 355KB), introduced on 1 October 2020, saw a reduction in the contribution from gas and electricity, where prices fell by 12.3% and 3.2%, respectively, between September and October 2020. Prices fell by 8.7% for gas and 2.2% for electricity between the same two months a year ago.

The increases in Council Tax that started in 2016 caused its contribution to rise over the following few years, but there was little change when the 2019 increases were introduced in April last year and a slight easing in the contribution in April this year.

The reduction in the contribution from rents between 2016 and 2018 is likely to be a result of a policy to reduce social housing rent. The contribution from rent in total, though, has subsequently risen since early 2018.

Other housing costs (namely, regular maintenance and repair, along with water and sewerage services) tend to make small contributions to the 12-month inflation rate. The contribution from water and sewerage services turned negative in April this year when bills were reduced as a result of the Water Services Regulation Authority (Ofwat) encouraging suppliers to reduce household bills.

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6. Consumer price inflation data

Consumer price inflation tables
Dataset | Released 18 November 2020
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 18 November 2020
Comprehensive database of time series covering measures of inflation data for the UK including the CPIH, CPI and RPI.

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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 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)

The Consumer Prices Index including owner occupiers’ housing costs (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 of these 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. First published in 1997 as the Harmonised Index of Consumer Prices (HICP), 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 time series.

Retail Prices Index (RPI)

The Retail Prices Index (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 time series section of the inflation and price indices area of our website.

The UK Statistics Authority recommended in 2019 that the publication of the RPI should be stopped at a point in the future and that in the interim, the shortcomings of the RPI should be addressed by introducing CPIH data sources and methods into its production. The Authority and HM Treasury subsequently launched a consultation on 11 March 2020 on the Authority’s proposal to address the shortcomings of the RPI. HM Treasury consulted on the appropriate timing for the proposed changes to the RPI to take place. The Authority consulted on how to make its proposed methodological changes to the RPI in a way that follows best statistical practice. The response to that consultation will be published on 25 November 2020, alongside the Spending Review. Further information can be found on the UKSA website.

Alongside the consultation on the future of the RPI, we published proposed updates to our article on the three “use cases” for our consumer inflation measures in Measuring changing prices and costs for consumers and households, proposed updates: March 2020.

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8. Measuring the data

Coronavirus

In response to the coronavirus (COVID-19) pandemic, we are working to ensure that we continue to publish our consumer price statistics. In line with the current government guidelines, we are providing Office for National Statistics (ONS) staff with the opportunity to work from home and to avoid unnecessary travel and social contact. We have an established infrastructure, and these changes will not affect our ability to produce our Consumer Prices Index including owner occupiers’ housing costs (CPIH), Consumer Prices Index (CPI) and Retail Prices Index (RPI) statistics.

In April to July 2020, there were challenges around some of our collection activities, as 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. However, in August, our price collectors were able to resume full or partial in-store collections in 128 locations following the approach detailed in our Consumer price statistics: resuming a field-based price collection article. 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).

Where we are unable to collect prices locally, prices will continue to be collected over the internet and by phone and email. For October, the impact of government restrictions or localised lockdowns meant in some instances we had to revert to online collections. For sampled locations in England under Very High Alert Level (Tier 3) Regulations; Scotland; Wales; and Northern Ireland where travel was restricted to only essential journeys, our collectors reverted to online collections. In total, our price collectors were able to complete full local collections in 77 locations and partial collections in a further 19 locations. Where the government in England introduced tougher national restrictions from 5 November 2020, for the November price collection, we will be returning to online collections for all 141 UK locations.

For the September and October 2020 price collections, we were unable to collect international rail fares, as the sampled destinations are currently excluded from the Foreign, Commonwealth and Development Office (FCDO) advice on countries and territories that are exempt from advice against ”all but essential” international travel. This means that the number of items normally in the basket that were unavailable to consumers in October was eight. The unavailable items account for 1.1% of the CPIH basket by weight. The list of unavailable items in October, and the changes to the list from previous months, are shown in Table 58 in the Consumer price inflation dataset.

The Coronavirus and the effects on UK prices article describes the approach we have taken for imputing price movements for items that are currently unavailable to consumers to purchase. For unavailable items in the RPI, we have imputed price movements based on the all-available-items price movement of the RPI (annual or monthly, depending on whether the series is seasonal or not), and for the CPIH and CPI we have imputed price movements based on the all-available-items price movement of the CPI. It is necessary to use the CPI price movement for both, so that both CPIH and CPI are constructed from the same set of item indices.

It should be noted that following the publication of the Coronavirus and the effects on UK prices article, we changed the imputation methodology applied to four items from a non-seasonal to a seasonal method. We are sorry for any inconvenience caused by these changes not being reflected in Annex B of the article. The affected items are (in item number order):

  • NHS dental charges (520327)
  • Admission to historic monuments (640211)
  • Football admissions (640221)
  • Part-time leisure classes (640228)

Overall, the number of price quotes that are usually collected in store and that are used in constructing the October 2020 indices was 92.0% of the number of price quotes collected in February 2020 (excluding unavailable items). It is not unusual for the proportion of quotes to be below 100% as there are often prices that are either temporarily missing or where the price for a non-comparable replacement item is collected. For this reason, we have compared the coverage in October with the February index collected before the social distancing policies and movement restrictions came into effect.

The price quotes collected by ONS staff or from administrative data account for approximately 20% of the price quotes in our CPIH sample. Once all price quotes have been weighted together, the overall coverage for goods and services available in October 2020 was 90.0% of the comparable coverage collected previously (excluding unavailable items). Unlike the in-store collection, where coverage is based on the number of quotes compared with the February collection, the coverage of holiday items (whose prices are collected centrally by ONS staff) uses the number of price quotes collected in the latest month compared with the number collected in the same month last year. This was more appropriate for the coverage of holidays, as the number of quotes collected in the summer months will always be greater than in February.

The categories where the number of price quotes used in constructing the indices is less than half the number used in February have been identified in relevant tables in the accompanying dataset, for example, in Table 3.

We continue to engage with other National Statistical Institutes (NSIs) and international organisations to understand how they are responding to similar issues. Under Section 21 of the Statistics and Registration Services Act 2007, the Bank of England must make a determination on any changes to the coverage or basic calculation of the RPI that we propose, to establish whether such a change “constitutes a fundamental change in the index which would be materially detrimental to the interests of the holders of relevant index-linked gilts”. We shared our plan with the Bank of England, and they determined that none of the temporary changes outlined “were both fundamental changes to the coverage or basic calculation of the RPI, and also materially detrimental to the holders of relevant index-linked gilts”. The correspondence is available.

Coronavirus supplementary analysis

In August 2020, we published an experimental series looking at the impact of changing consumer spending patterns on consumer price inflation during the coronavirus (COVID-19) pandemic.

This month we have published the effect of reweighting the consumer prices basket during the coronavirus (COVID-19) pandemic which contains experimental consumer price statistics for both CPIH and 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.

The Consumer prices alternative basket analysis, which explored different methods of dealing with unavailable goods and services in consumer price inflation measurement, has been discontinued. There are now relatively few unavailable items, so experimental series that update the baskets to remove unavailable items would result in an annual growth rate equal to the official rates.

Consultation on changes to the Retail Prices Index

The UK Statistics Authority (UKSA) recently ran a joint consultation with HM Treasury on changes to the Retail Prices Index (RPI) methodology. The response to that consultation will be published on 25 November, alongside the Spending Review. Further information can be found on the UKSA website.

After EU withdrawal

As the UK leaves the EU, it is important that our statistics continue to be of high quality and are internationally comparable. During the transition period, those UK statistics that align with EU practice and rules will continue to do so in the same way as before 31 January 2020.

After the transition period, we will continue to produce our consumer price statistics in line with the UK Statistics Authority’s Code of Practice for Statistics and in accordance with internationally agreed statistical guidance and standards.

These currently include the standard international Classification of Individual Consumption According to Purpose (COICOP) system, developed by the UN Statistical Division, and for the CPI, the rules underlying the construction of the HICP, developed by Eurostat in conjunction with EU member states and European Economic Area countries.

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. From April to July 2020, as a result of the coronavirus pandemic, we collected all prices centrally by phone, email and from websites and used imputation to produce series for some goods and services, as outlined in Coronavirus and the effects on UK prices.

For the August index, price collectors were able to resume full in-store collections in 102 of the locations and partial collection in a further 26 out of the 141 locations used across the country. For the remaining locations, which were affected by local lockdowns and collection issues, prices continued to be collected centrally. Consumer price statistics: resuming a field-based price collection describes the principles used in resuming price collection across the country and discusses specific issues arising from the resumption.

The figures in this publication use data collected on or around 13 October 2020.

Consumer price indices, a brief guide gives an overview of consumer price statistics.

The Consumer Prices Indices Technical Manual covers the concepts and methodologies underpinning the indices in more detail. The latest version was released on 18 September 2019.

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

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Consumer price inflation QMI.

Consumer price inflation, updating weights: 2020 was released on 19 March 2020 and describes the latest update of the relative weights of items in the consumer price inflation basket to ensure they remain representative of current consumer spending patterns. A new source of information for some of the underlying low-level weights was also introduced with the February index. Impact of introducing a new data source for shop-type weights on consumer price indices, released on 12 February 2020, describes the change of source that has been made.

Consumer price inflation basket of goods and services: 2020, released on 16 March 2020, outlines the review process for the items making up the inflation basket used to calculate the UK consumer price inflation indices and the changes in the latest year.

Explaining the contribution to change in the 12-month rate (PDF, 37KB) explains how the various types of goods and services contribute to the change in the 12-month inflation rate between the latest two months. The size and direction of these contributions depend on how prices changed between both the latest two months this year and the same two months last year. For example, the price of a product could make an upward contribution to the change in the rate even if it fell, provided that it fell by less than it did between the same two months a year ago.

Users and uses of consumer price inflation statistics provides information about the users and uses of consumer price inflation statistics and user experiences of these statistics. It also provides information on the characteristics of the different measures of consumer price 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 that we currently publish and those that are under development. We have also published proposed updates to the article in Measuring changing prices and costs for consumers and households, proposed updates: March 2020. Specifically, 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 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. RPI as a measure of inflation, released on 8 March 2018, describes the issues with the RPI.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Andy King
cpi@ons.gov.uk
Ffôn: Consumer price inflation enquiries: +44 (0)1633 456900. Consumer price inflation recorded message (available after 8:00 on release day): +44 (0) 800 011 3703