There is more good news for the United Kingdom (UK) economy today as the latest inflation out-turn shows general price increases continuing to trend downwards while registering a meagre economic growth of 0.1% in February.
The UK’s Office of National Statistics (ONS) is reporting that the Consumer Prices Index, including owner occupiers’ housing costs (CPIH), rose by 3.8% in the 12 months to March 2024, same as it did in February. The 12 months Consumer Prices Index (CPI) rose by 3.2%, down from 3.4% in February.
On a monthly basis, CPIH rose by 0.6% in March 2024, relative to an increase of 0.7% in March 2023, while CPI rose by 0.6% in March 2024, relative to an increase of 0.8% in March 2023.
The ONS reports that “the 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 the most all-encompassing gauge of inflation. The unchanged CPIH annual inflation rate in March 2024 reflected offsetting contributions from the different product groups.
There were downward contributions from five divisions, most notably food and non-alcoholic beverages, offset by upward contributions from three divisions, particularly housing and household services.
The largest downward contribution to the monthly change in both CPIH and CPI annual rates came from food, with the largest effects coming seen on bread and cereals, and meat, of which prices rose by 0.2%, less than the rise of 2.2% a year ago.
The largest, partially offsetting, upward contribution came from motor fuels, with prices rising this year but falling a year ago.
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