The United Kingdom’s consumer price index (CPI) rose by 0.7 per cent last month to stand at 8.7 per cent.
This was the same 0.7 per cent increase for the same period a year ago. The UK Office of National Statistics says the consumer price index including owner occupiers’ housing costs (CPIH) rose by 7.9 per cent as at May 2023, up from 7.8 per cent in April.
On a monthly basis, CPIH rose by 0.6 per cent in May 2023 compared to an increase of 0.6 per cent in May 2022. 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 16 per cent of the CPIH and is the main driver for differences between the CPIH and CPI inflation rates. This makes the CPIH the most comprehensive measure of inflation.
The slight increase in the annual CPIH inflation rate in May 2023 broadly reflected offsetting contributions across the different product groups. The largest upward contributions to the monthly change in both the CPIH and CPI annual rates resulted from rising prices for air travel, recreational and cultural goods and services, and second-hand cars.
Prices for recreational and cultural goods and services rose by 6.8 per cent in the year to May 2023, up from 6.4 per cent in April, and the highest rate since August 1991. Lower prices for motor fuel led to the largest downward contribution to the monthly change in CPIH and CPI annual rates.
However, prices for food and non-alcoholic beverages rose in May 2023 but by less than in May 2022, also leading to an easing in the annual rates.