Consumer price inflation, UK: October 2023

• The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 4.7% in the 12 months to October 2023, down from 6.3% in September.
• On a monthly basis, CPIH rose by 0.1% in October 2023, compared with a rise of 1.6% in October 2022.

• The Consumer Prices Index (CPI) rose by 4.6% in the 12 months to October 2023, down from 6.7% in September.

• On a monthly basis, CPI did not change in October 2023, compared with a rise of 2.0% in October 2022.

• The largest downward contribution to the monthly change in both CPIH and CPI annual rates came from housing and household services, where the annual rate for CPI was the lowest since records began in January 1950.

• The second-largest downward contribution to the monthly change in both CPIH and CPI annual rates came from food and non-alcoholic beverages where the annual rate was the lowest since June 2022.
• Core CPIH (excluding energy, food, alcohol and tobacco) rose by 5.6% in the 12 months to October 2023, down from 5.9% in September; the CPIH goods annual rate fell from 6.2% to 2.9%, while the CPIH services annual rate fell from 6.3% to 6.2%.
• Core CPI (excluding energy, food, alcohol and tobacco) rose by 5.7% in the 12 months to October 2023, down from 6.1% in September; the CPI goods annual rate fell from 6.2% to 2.9%, while the CPI services annual rate fell from 6.9% to 6.6%.

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 4.7% in the 12 months to October 2023, down from 6.3% in September and a recent peak of 9.6% in October 2022. Our indicative modelled consumer price inflation estimates, as reported in our Consumer price inflation, historical estimates and recent trends, UK: 1950 to 2022 article, suggest that the October 2022 rate was the highest in over 40 years (the CPIH National Statistic series begins in January 2006).

The annual rate in October 2023 was the lowest since November 2021.

The easing in the annual rate between September and October 2023 was a result of prices rising by 0.1% on the month compared with a rise of 1.6% a year earlier.

The Consumer Prices Index (CPI) rose by 4.6% in the 12 months to October 2023, down from 6.7% in September, and 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 annual inflation rate since 1981 (the CPI National Statistic series begins in January 1997). The annual rate in October 2023 was the lowest since October 2021.

The easing in the annual rate between September and October 2023 was a result of prices remaining the same on the month compared with a rise of 2.0% a year earlier.

The main drivers of the annual inflation rate for CPIH and CPI are the same where they are common to both measures. However, the owner occupiers' housing costs (OOH) component accounts for 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 of this bulletin 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.

The easing in the annual inflation rates principally reflected negative contributions from three divisions, with large downward effects from housing and household services, food and non-alcoholic beverages, and restaurants and hotels. Recreation and culture provided the only large positive contribution.

Housing and household services

Housing and household services prices fell by 0.3% between September and October 2023, compared with a rise of 3.4% between the same two months a year ago. This resulted in an easing in the annual rate to 1.9% in October 2023, down from 5.7% in September and a peak of 11.8% in January and February.

The decrease in the rate between September and October 2023 reflected downward effects from gas and electricity. Gas costs fell by 31.0% in the year to October 2023, compared with a rise of 1.7% in September. This is the lowest annual rate since records began in January 1989. Electricity costs fell by 15.6% in the year to October 2023, compared with a rise of 6.7% in September. This is the lowest annual rate since records began in January 1989.

Although electricity and gas prices have fallen on the month and the year, their prices are still high in comparison to recent years. The price of gas in October 2023 was around 60% higher than it was in October 2021 while the price of electricity in October 2023 was around 40% higher than it was in October 2021. Electricity, gas and other fuels fell by 6.9% between September and October 2023 and were down 21.7% on the year.

The downward contribution from gas and electricity was partly offset by the owner occupiers' housing costs (OOH) component of CPIH, which rose by 5.4% in the 12 months to October 2023, up from 5.0% in September. This is the highest annual rate since July 1992 where it was 6.9%. The OOH rose by 0.7% on the month in October 2023, compared with 0.3% the same month a year ago.

Food and non-alcoholic beverages

Food and non-alcoholic beverage prices rose by 0.1% between September and October 2023 following a 0.1% decline the previous month; this compares with a rise of 2.0% between the same two months a year ago. This saw an easing in the annual rate to 10.1% in October 2023, down from 12.2% in September and a recent high of 19.2% in March 2023, the highest annual rate seen for over 45 years.

The easing in the annual rate for food and non-alcoholic beverages was driven by price movements which saw 9 of the 11 classes provide a downward contribution in the latest month. The largest downward contributions came from the milk, cheese and eggs category and the vegetables category.

Within milk, cheese and eggs, there were downward effects from three of the six subclasses, notably from yoghurt, with prices in this category falling by 2.9% between September and October this year, compared with a rise of 5.8% between the same two months a year ago. This has led to the annual rate for milk, cheese and eggs easing to 7.9% in the year to October 2023, down from 12.3% in September.

Within vegetables there were downward effects from three of the six subclasses, notably from crisps, with prices for these products falling by 3.4% between September and October this year, compared with a rise of 4.1% between the same two months a year ago. This has led to the annual rate for vegetables easing to 10.8% in the year to October 2023, down from 14.4% in September.

The remaining two classes were oils and fats, and coffee, tea and cocoa, and they provided no change in contribution to the 12-month rate. Every subclass in each of these categories also provided no change in contribution to the 12-month rate.

Although the annual rate at which food prices have been increasing has been slowing, the food price index is still at a high level in comparison to recent years. The price of food in October 2023 was around 30% higher than it was in October 2021.

Restaurants and hotels

Restaurant and hotel prices remained the same between September and October 2023, compared with a rise of 1.0% between the same two months a year ago. This resulted in an easing in the annual rate to 7.6% in October 2023, down from 8.6% in September and a peak of 12.1% in February.

As the negative contribution from catering was small, the easing in the rate reflected the downward effect from accommodation services, where prices fell by 2.5% between September and October 2023 compared with a rise of 1.2% between the same two months last year.

The downward effect came almost entirely from overnight hotel accommodation, where prices fell by 9.2% between September and October 2023 compared with a rise of 1.1% between the same two months last year. Prices for overnight hotel accommodation are taken just before the date of stay and can vary depending on the number of available rooms, resulting in month-to-month volatility.

Transport

Although the transport division did not provide a large negative contribution to the change in the annual rate of inflation, it had sizeable offsetting changes in contribution below the divisional level. Prices in this division fell by 0.2% between September and October 2023, compared with a flat rate between the same two months a year ago. This resulted in an easing in the annual rate to 0.5% in October 2023, down from 0.7% in September.

The largest contributing downward effect came from the purchase of used cars where prices fell by 3.0% between September and October 2023, compared with a fall of 0.6% in the same months last year. On an annual basis, prices fell by 3.6% in the year to October, compared with a fall of 1.2% in the year to September.

The downward contribution from used cars was fully offset by an upward contribution from motor fuels. The average price of petrol rose by 1.5 pence per litre between September and October 2023 to stand at 155.1 pence per litre in October 2023. Last year, prices fell by 2.9 pence per litre to stand at 163.6 pence per litre in October 2022. Similarly, diesel prices rose by 4.8 pence per litre this year to stand at 162.2 pence per litre in October 2023. Last year, they rose by 2.3 pence per litre to stand at 183.9 pence per litre in October 2022. These movements resulted in motor fuel prices falling by 7.6% in the year to October 2023, compared with a fall of 9.7% in the year to September.

Figure 7 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 5.6% in October 2023. This is the lowest rate since January 2023 and is down from 6.5% in May, 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 2.9% in the 12 months to October 2023, down from 6.2% in September. The category providing the largest negative contribution to the fall in the rate is energy where prices fell by 16.0% in the year to October 2023, having fallen by 0.7% in the year to September.

The CPIH all services index rose by 6.2% in the 12 months to October 2023, down from 6.3% in September. The largest downward contribution to the change came from package holidays and accommodation.

Figure 8 shows how each of the main groups of goods and services contributed to the change in the annual CPIH inflation rate between September and October 2023. 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 September 2023 and the rate in October 2023. These differences sum to the change in the annual CPIH rate between the latest two months, that is, the easing from 6.3% to 4.7%.

The slowing in the rate into October 2023 reflected downward contributions from eight divisions, offset by an upward contribution from one division. The vast majority of the overall downward contribution came from housing and household services, followed by food and non-alcoholic beverages while the upward contribution came from recreation and culture.

Figure 9 shows the extent to which 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 adjusted 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, 4.7% in October 2023.

The largest upward contributions to the annual CPIH inflation rate in October 2023 came from food and non-alcoholic beverages, and restaurants and hotels. The contribution from the former group was 0.95 percentage points, the lowest since June 2022. The contribution from the latter group was 0.82 percentage points, down from 0.93 percentage points in September 2023.

The 0.31 percentage-point contribution to the annual rate in October 2023 from clothing and footwear was the lowest from that division since January 2023 and the 0.58 percentage-point contribution to the annual rate in October 2023 from housing and household services was the smallest from that division since April 2021.

Figure 10 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 rose from 0.80 to 0.85 percentage points between September and October 2023, which means that the contribution is now higher than at any time since at least January 2006. The contribution from electricity, gas and other fuels was negative for the first time since March 2021.

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

Figure 11 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 12 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 5.7% in the year to September 2023, down from 6.1% in September and down from a recent high of 7.1% in May, which was the highest recorded since March 1992. The CPI all goods index rose by 2.9% in the year to October 2023, down from 6.2% in September. The CPI all services index rose by 6.6% in the year to October 2023, down from 6.9% in September 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 13 shows how each of the main groups of goods and services contributed to the change in the annual CPI inflation rate between September and October 2023.

The slowing in the rate into October 2023 was driven by downward contributions from nine divisions, offset by an upward contribution from two divisions. The largest downward contributions came from housing and household services and food and non-alcoholic beverages while the largest upward contribution came from recreation and culture.

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.

Figure 14 shows the extent to which 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. The different items included in each index mean that the largest contributions to the annual CPI inflation rate may not be from the same divisions that made the largest contributions to the annual CPIH rate. However, in this instance the largest-contributing divisions are the same, with the largest contribution coming from food and non-alcoholic beverages (at 1.18 percentage points) and the second largest contribution coming from restaurants and hotels (at 1.01 percentage points).

Annual inflation rate

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

Consumer price inflation

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

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

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

Consumer Prices Index

The CPI is a measure of consumer price inflation produced to international standards and is based on European regulations for the Harmonised Index of Consumer Prices on the Eurostat website. 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 6.1% in October 2023.

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.

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 will begin publication of our experimental Household Costs Indices on a quarterly basis, which will include new estimates for the period from January 2022 to September 2023 and revised estimates from 2007 to 2021. This reflects the ambitions set out in our Statement on the future of the Household Costs Indices in June 2022, to move from annual publications to a regular quarterly publication in 2023. We are holding a set of events to explain the HCIs and show how changing prices and costs affect different household groups, such as income deciles, retired and non-retired households, and renter and owner-occupier households. To sign up and for more information, please visit our Eventbrite page.

The HCIs reflect how different types of households experience changing prices. The HCIs differ from the Consumer Prices Index including owner occupiers' housing costs (CPIH) and the Consumer Prices Index (CPI), which are based on recognised economic principles, and which provide an aggregate measure of inflation for household spending in the UK.

To meet our objective of beginning our quarterly HCIs publication in 2023, we have suspended our publication of CPIH-consistent subgroup data, which show the CPIH and CPI rates of inflation for different household subgroups. However, we have published provisional 2023 estimates for selected subgroups based on the previous year's weights (updated for changes in total UK spending) in Provisional CPIH and CPI-consistent inflation rate estimates for UK household groups: January to September 2023. 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 data will therefore no longer be published.

Weights for 2023 consumer price inflation statistics

In line with usual practice at the start of each year, the expenditure weights used in compiling the CPIH and the CPI were 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, we adjusted the data so that the resulting weights were more reflective of the year immediately before use in consumer price inflation. This is in line with the procedures adopted in 2021 and 2022. More information is available in our Consumer price inflation, updating weights articles.

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 Transformation of consumer price statistics article, released on 6 July 2023.

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 back casts.

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 17 October 2023.

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

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

The three cases refer firstly to the Consumer Prices Index including owner occupiers' housing costs (CPIH) as our lead measure of inflation based on economic principles. They also refer to the Household Costs Indices (HCIs) as a set of measures to reflect the change in costs as experienced by 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.