Inflation in the United Kingdom (UK) continues to decline based on the latest data coming from the UK’s Office of National Statistics (ONS).
The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 4.7 per cent in the 12 months to October 2023, down from 6.3 per cent in September. At the same time, the Consumer Prices Index (CPI) rose by 4.6 per cent, down from 6.7 per cent in September.
On a monthly basis, CPIH rose by 0.1 per cent in October 2023 compared to an increase of 0.1 per cent in October 2022, while CPI remain the same in October 2023, compared with a rise of 2.0 per cent in October 2022.
The ONS says “the primary factors influencing the yearly inflation rates for both CPIH and CPI are identical in cases where the measures overlap. Nevertheless, a significant distinction between CPIH and CPI inflation rates arises from the owner occupiers’ housing costs element, which constitutes 16 per cent of CPIH.”
Easing in annual inflation rates
This aspect predominantly contributes to the disparities between the inflation rates of CPIH and CPI, thus establishing CPIH as the most all-encompassing gauge of inflation. 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. The largest downward contribution to the monthly change in both CPIH and CPI annual rates came from housing and household services, where prices fell by 0.3 per cent between September and October 2023 relative to a rise of 3.4 per cent between the same two months a year ago.
These contributed to the annual CPI rates falling to 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 prices rose by 0.1 per cent between September and October 2023 relative to a rise of 2.0 per cent between the same two months a year ago, thus contributing to the easing of the annual rates to the lowest levels since June 2022.
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