Estimates say October’s inflation was highest observed in over 40 years

England’s Office of National Statistics (ONS) is reporting that the Consumer Prices Index (CPI) rose to 10.5 per cent in December while Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose to 9.2 per cent.

The CPI and CPIH in November 2022 was 10.7 per cent and 9.3 per cent, respectively. The CPI estimates indicate October’s inflation rate was the highest observed in over 40 years.

“In the most recent month however, the CPIH annual rate was equal to the rate recorded just over 30 years earlier between September and December 1990,” the ONS reports.

Since December 2022, the largest upward contributions to the annual CPIH inflation rate came from increases in the divisions, ‘housing and household services’ (principally from increases in electricity, gas, and other fuels) and increases in food and non-alcoholic beverages.

Annual inflation rates

On a monthly basis, CPIH rose by 0.4 per cent in December 2022, compared with a rise of 0.5 per cent in December 2021. The largest downward contribution to the change in both the CPIH and CPI annual inflation rates between November and December 2022 came from transport (particularly motor fuels).

Clothing and footwear and recreation and culture with rising prices in restaurants and hotels and food and non-alcoholic beverages accounted for the largest increase, partially offsetting upward contributions.

According to the ONS, “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 is the main driver for differences between the CPIH and CPI inflation rates. This makes CPIH our most comprehensive measure of inflation”.