CPIH rose by 9.6% in the 12 months to October 2022

Durrant Pate/Contributor

Rising domestic fuel prices is pushing the United Kingdom’s inflation rate to levels last seen more than 40 years ago.

The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 9.6 per cent in the 12 months to October 2022, up from 8.8 per cent in September 2022. The annual inflation rate was last higher in the constructed historical estimates in December 1980, when it stood at 9.8 per cent.

On a monthly basis, CPIH rose by 1.6 per cent in October 2022, compared with a rise of 0.9 per cent in the same month a year earlier. The Consumer Prices Index (CPI) rose by 11.1 per cent in the 12 months to October 2022, up from 10.1 per cent in September 2022.

In October 2022, the CPI annual inflation rate was the highest annual CPI inflation rate in the National Statistic series, which began in January 1997. Indicative modelled consumer price inflation estimates suggest that the CPI rate would have last been higher in October 1981, where the estimate for the annual inflation rate was 11.2 per cent.

October monthly CPI data

The CPI monthly rate was 2.0 per cent in October 2022, compared with 1.1 per cent in October 2021. This means that between September and October 2022, the prices of goods and services bought or consumed by UK households have increased by 2.0 per cent.

This matched the annual CPI inflation rate in July 2021, meaning prices rose between September and October 2022 by as much as they did in the entire year to July 2021. The largest contribution to the annual rate in October 2022 for both CPIH and CPI came from housing and household services.

Other large contributions came from food and non-alcoholic beverages, and from transport. Despite the introduction of the government’s Energy Price Guarantee, gas and electricity prices made the largest upward contribution to the change in both the CPIH and CPI annual inflation rates between September and October.

The second largest upward contribution to the change came from rising food prices, while transport (principally motor fuels and second-hand cars) made the largest offsetting downward contribution.

Main inflation drivers

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 around 17 per cent of the CPIH, and it is the main driver for differences between the CPIH and CPI inflation rates.

This makes CPIH the most comprehensive measure of inflation. The increase to the annual inflation rate in October 2022 reflected, principally, the changes to the cost of domestic energy supplies.

There were also increases from rising food and non-alcoholic beverage prices, and from items for recreation and culture. There were large, partially offsetting, downward effects from the transport section, more specifically from the price of motor fuels and second-hand cars.