The United Kingdom’s Consumer Prices Index (CPI) went down to 6.8% in July coming from 7.9% in June. 

At the same time, England’s Office of National Statistics (ONS) reports that the Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose also went down by 6.4% as at July 2023, coming from 7.3% in June. On a monthly basis, CPIH fell by 0.3% in July 2023 compared to an increase of 0.6% in July 2022, while CPI fell by 0.4% in July 2023, in comparison to a 0.6% rise in July 2022.

According to the ONS, “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 (OOH) element, which constitutes 16% of CPIH. This aspect predominantly contributes to the disparities between the inflation rates of CPIH and CPI, thus establishing CPIH as our most all-encompassing gauge of inflation.” 

The most substantial downward influences on the monthly shifts in both CPIH and CPI annual rates were attributed to declining gas and electricity prices. In July 2023, there was a moderate increase in food prices, although the rise was less than that of July 2022, contributing to a moderation in the annual inflation rates.

Notably, the categories of Hotels and air passenger transport played a pivotal role in counterbalancing these effects, offering the most significant upward contributions to the rate fluctuations. The CPIH annual inflation rate for housing, water, electricity, gas, and other fuels fell from a high of 11.8% in January and February 2023 to 5.4% in July. Also, down from 7.3% month over month. 

Meanwhile, the CPI annual inflation rate for housing, water, electricity, gas and other fuels fell from a high of 26.7% in January of 2023 and 12% in June 2023, to 6.8% in July. In retrospect, Lower prices for gas and electricity have led to the largest downward contribution to the monthly change in CPIH and CPI annual rates.