Consumer price inflation, UK - Office for National Statistics (2024)

• The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.1% in the 12 months to July 2024, up from 2.8% in June 2024.
• On a monthly basis, the level of CPIH was little changed in July 2024, compared with a fall of 0.3% in July 2023.

• The Consumer Prices Index (CPI) rose by 2.2% in the 12 months to July 2024, up from 2.0% in June 2024.

• On a monthly basis, CPI fell by 0.2% in July 2024, compared with a fall of 0.4% in July 2023.

• The largest upward contribution to the monthly change in both CPIH and CPI annual rates came from housing and household services where prices of gas and electricity fell by less than they did last year; the largest downward contribution came from restaurants and hotels, where prices of hotels fell this year having risen last year.

• Core CPIH (excluding energy, food, alcohol, and tobacco) rose by 4.1% in the 12 months to July 2024, down from 4.2% in June; the CPIH goods annual rate rose from negative 1.4% to negative 0.5%, while the CPIH services annual rate fell from 6.0% to 5.7%.

• Core CPI (excluding energy, food, alcohol and tobacco) rose by 3.3% in the 12 months to July 2024, down from 3.5% in June; the CPI goods annual rate rose from negative 1.4% to negative 0.6%, while the CPI services annual rate fell from 5.7% to 5.2%.

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.1% in the 12 months to July 2024, up from 2.8% in June, but down from a recent peak of 9.6% in October 2022.

Our Consumer price inflation, historical estimates and recent trends article suggests that the October 2022 inflation rate was the highest in over 40 years (the CPIH accredited official statistic series begins in January 2006).

The monthly CPIH rate was broadly flat in July 2024, compared with a fall of 0.3% in July 2023.

The owner occupiers’ housing costs (OOH) component of CPIH rose by 7.0% in the 12 months to July 2024, up from 6.8% in the 12 months to June. This is the highest annual rate since March 1992 in the constructed historical series. OOH costs rose by 0.6% on the month, compared with a 0.4% increase between June and July 2023.

The Consumer Prices Index (CPI) rose by 2.2% in the 12 months to July 2024, up from 2.0% in June 2024, and well below its recent peak of 11.1% in October 2022. Our indicative modelled consumer price inflation estimates suggest that the October 2022 peak was the highest rate in over 40 years (the CPI accredited official statistic series begins in January 1997).

The monthly CPI rate in July 2024 was negative 0.2%, compared with negative 0.4% in July 2023.

The main drivers of the annual inflation rate for CPIH and CPI are the same where they are common to both measures. However, the OOH component accounts for approximately 16% of the CPIH and is the main influence on differences between the CPIH and CPI inflation rates. This makes CPIH our most comprehensive measure of inflation. We cover this in more detail in Section 4: Latest movements in CPIH inflation and provide a commentary on the CPI in Section 5: Latest movements in CPI inflation. We also cover both CPIH and CPI in Section 3: Notable movements in prices, though the figures reflect CPIH.

The rise in the annual CPIH inflation rates in July 2024 reflected upward contributions from four divisions, offset by downward contributions from five. The largest upward effect came from housing and household services. The largest downward effects came from restaurants and hotels, and transport.

Housing and household services

Monthly housing and household services prices rose by 0.1% in July 2024, having fallen by 1.4% last year. The annual rate rose to 3.7% in the year to July 2024, up from 2.3% in the year to June. The rise in the divisional annual rate is mainly because of gas prices, although electricity prices also contributed to this rise.

Figure 2 shows rebased indices for gas and electricity from March 2021 to July 2024. Although monthly gas and electricity prices fell by 7.8% and 6.8% respectively in July 2024, as these falls were less than their equivalent falls in July 2023 (negative 25.2% and negative 8.6%), annual prices fell by a lower amount in July 2024 (negative 22.8% and negative 19.5%) than they did in June 2024 (negative 37.5% and negative 21%). This is what led to electricity and gas contributing to the rise in CPI and CPIH annual rates in July 2024.

Although energy prices are lower in July 2024 than they were a year ago and are much lower than their peak in the first quarter of 2023, gas and electricity prices in July 2024 are still around 68% and 45% higher, respectively, than in March 2021.

Restaurants and hotels

Prices for restaurants and hotels fell by 0.4% between June and July this year, compared with a rise of 0.9% a year ago. The annual rate rose by 4.9% in the year to July 2024, down from 6.3% in the year to June. The slower annual rate was almost entirely because of the price of hotels, which saw a monthly fall of 6.4% compared with a rise of 8.2% a year ago.

Transport

Prices in the transport division rose by 0.1% in the year to July 2024, compared with a rise of 0.7% in the year to June. On a monthly basis, prices rose by 0.7% compared with a rise of 1.3% a year ago.

The decrease in the annual rate was the result of downward effects from categories including maintenance and repairs of personal transport equipment, passenger transport by air, and motor fuels.

The average price of petrol fell by 1.4 pence per litre between June and July 2024 to stand at 144.4 pence per litre, down from 143.2 pence per litre in July 2023. Diesel prices fell by 1.1 pence per litre in July 2024 to stand at 150.4 pence per litre, up from 145.2 pence per litre in July 2023. These movements resulted in overall motor fuel prices rising by 1.8% in the year to July 2024, compared with a rise of 2.6% in the year to June.

The main counteracting upward effect came from second-hand cars where prices rose by 0.1% on the month compared with a fall of 1.4% a year ago. On an annual basis, prices fell by 8.4% in the year to July 2024, compared with a fall of 9.8% in the year to June 2024. The annual rate has been negative for twelve consecutive months.

Food and non-alcoholic beverages

Food and non-alcoholic beverage prices rose by 1.5% in the year to July 2024, the same rate as the year to June. The June figure is the joint lowest annual rate since October 2021, when it was 1.3%, and it is the first time since March 2023 that the annual rate has not eased, having seen 15 consecutive months of slowing prices before then. The annual rate of 1.5% is down from a recent high of 19.2% in March 2023, the highest annual rate seen for over 45 years.

Prices for this division were unchanged between June and July 2024, compared with a monthly rise of 0.1% a year ago. Prices have been relatively stable since early summer 2023, compared with sharp rises over the previous 12 months. The annual rate of 1.5% in July 2024 compares with 14.9% in July 2023.

There were downward contributions to the change in the annual rate of inflation between June and July 2024 in 4 of the 11 food and non-alcoholic beverages classes. These contributions came from:

• bread and cereals
• fish
• vegetables
• mineral waters and soft drinks

There were upward contributions in three classes, which came from a combination of:

• milk, cheese and eggs
• fruit
• sugar, jam and honey

Four classes remained the same.

The products in this division that provided a notable downward contribution to the change in the annual rate included fresh orange juice, sponge cake, canned tuna, and cheese spread.

The products in this division that provided a notable upward contribution to the change in the annual rate included packs of individual cakes, sliced pre-packed ham, milk, and large chocolate bars.

Figure 6 shows the annual inflation rates for the Consumer Prices Index including owner occupiers' housing costs (CPIH) series for all goods and all services, together with CPIH excluding energy, food, alcohol and tobacco (often referred to as core CPIH). The CPIH inflation rate is added for comparison.

The core CPIH annual inflation rate was 4.1% in July 2024, which was the lowest rate since January 2022. This was down from a recent high of 6.5% in May 2023, which was the highest rate since November 1991, when it was also 6.5% in our Constructed historical series.

The CPIH all goods index fell by 0.5% in the 12 months to July 2024, compared with a fall of 1.4% in the 12 months to June. The largest upward contribution to the change in the annual rate came from energy.

The CPIH all services index rose by 5.7% in the 12 months to July 2024, down from 6.0% in June. The largest downward contribution to the change in the annual rate came from package holidays and accommodation.

Figure 7 shows offsetting contributions from the 12 divisions to the change in the annual CPIH inflation rate between June and July 2024. These differences sum to the change in the annual CPIH rate between the latest two months, that is, the increase from 2.8% to 3.1%.

The increase in the rate into July 2024 reflected upward contributions from four divisions offset by downward contributions from five divisions. The largest upward effect came from housing and household services. The largest downward effects came from restaurants and hotels, and from transport.

Figure 8 shows the extent to which the distinct categories of goods and services have contributed to the overall annual CPIH inflation rate over the last two years. The contribution of each category to the annual rate depends on the price movement in that category as well as its weight, which is updated annually.

The largest upward contributions to the annual CPIH inflation rate in July 2024 came from housing and household services and from restaurants and hotels. Although the contribution from restaurants and hotels was the second highest, it was still the lowest contribution from that division since March 2022.

The only negative contribution to the annual CPIH inflation rate came from furniture and household goods.

The contribution from food and non-alcoholic beverages eased for the 16th consecutive month, from a recent high of 1.76 percentage points in March 2023 to 0.14 percentage points in July 2024. This was the smallest contribution from this division since October 2021.

Figure 9 shows the contribution of owner occupiers’ housing costs (OOH) and Council Tax to the annual CPIH inflation rate in the context of wider housing-related costs. The Consumer Prices Index (CPI) differs from the CPIH because it does not include these two components.

OOH’s contribution of 1.13 percentage points in July 2024 is the main influence behind the increased contribution from housing and household services to the annual CPIH inflation rate in July 2024. This is the highest contribution from OOH to the annual CPIH inflation rate since at least January 2006.

While the Consumer Prices Index including owner occupiers' housing costs (CPIH) is our lead and most comprehensive measure of consumer price inflation, the Consumer Prices Index (CPI) is based on a harmonised methodology developed by Eurostat and allows for international comparisons to be drawn. For more information on the use cases for our consumer price inflation statistics, please refer to our Measuring changing prices and costs for consumers and households: December 2023 article.

Figure 10 shows CPI inflation for the UK against the EU and selected Group of Seven (G7) countries. While the UK CPI is produced on a comparable basis with EU countries, the US Harmonised Index of Consumer Prices (HICP) measure differs in some respects (see Note 1 of Figure 10). The UK's CPI inflation rate was below France (2.6%) and Germany (2.6%) in the 12 months to July 2024.

Figure 11 shows the annual inflation rates for the CPI all goods and all services series, together with CPI excluding energy, food, alcohol and tobacco (often referred to as core CPI). The headline CPI inflation rate is added for comparison.

Core CPI rose by 3.3% in the year to July 2024, down from 3.5% in June 2024 and below its recent high of 7.1% in May 2023, which was the highest recorded since 7.2% in March 1992 in our Constructed historical series. The CPI all goods index fell by 0.6% in the year to July 2024, compared with a fall of 1.4% in the year to June. The CPI all services index rose by 5.2% in the year to July 2024, down from 5.7% in June and down from 7.4% in July 2023, which was the joint highest rate (with May 2023) since March 1992.

As with the all-items annual inflation rates, the causes of CPIH and CPI goods and services inflation are the same (with the exception of owner occupiers' housing costs (OOH) and Council Tax, which are excluded from CPI). The causes are discussed in more detail in Section 4: Latest movements in CPIH inflation.

Figure 11 shows how each of the main groups of goods and services contributed to the change in the annual CPI inflation rate between June and July 2024.

The increase in the rate into July 2024 reflected upward contributions from four divisions offset by downward contributions from five divisions. The largest upward effect came from housing and household services. The largest downward effects came from restaurants and hotels and from transport.

Although the sizes of the contributions differ from CPIH, the main causes of the change are the same where they are common to both measures.

Figure 13 shows the extent to which the distinct categories of goods and services have contributed to the overall annual CPI inflation rate over the last two years.

The CPIH includes extra housing components not included in the CPI. This can result in the largest contributions to the annual CPI and CPIH inflation rates coming from different divisions. In July 2024, the largest-contributing division to CPI was restaurants and hotels (0.70 percentage point contribution to the CPI rate) whereas the largest-contributing division to CPIH was housing and household services. Lower gas and electricity prices this year compared with a year ago resulted in a negative contribution to CPI for housing and household services, but in CPIH, these were more than offset by an upward contribution from OOH.

Annual inflation rate

The most common approach to measuring inflation is the 12-month or annual inflation rate, which compares prices for the latest month with the same month a year ago. In any given month, the annual rate is determined by the balance between upward and downward price movements of the range of goods and services included in the index.

Consumer price inflation

Consumer price inflation is the rate at which the prices of goods and services bought by households rise or fall. It is estimated by using price indices. For an overview of the range of indices available and their uses, please see our Consumer price indices, a brief guide: 2017 and our Measuring changing prices and costs for consumers and households: December 2023 article.

Consumer Prices Index including owner occupiers' housing costs (CPIH)

The CPIH is the most comprehensive measure of inflation. It extends the Consumer Prices Index (CPI) to include a measure of the costs associated with owning, maintaining and living in one's own home, known as owner occupiers' housing costs (OOH), along with Council Tax. Both are substantial expenses for many households and are not included in the CPI.

Consumer Prices Index

The CPI is a measure of consumer price inflation produced to international standards and is based on European regulations for Eurostat's Harmonised Index of Consumer Prices. The CPI is the inflation measure used in the government's target for inflation.

The CPI is produced at the same level of detail as the CPIH in our accompanying dataset and accompanying data time series.

Owner occupiers' housing costs

Owner occupiers’ housing costs (OOH) are the costs of housing services associated with owning, maintaining and living in one’s own home.

Retail Prices Index (RPI)

The RPI does not meet the required standard for designation as an accredited official statistic. In recognition that it continues to be widely used in contracts, we continue to publish the RPI, its subcomponents, and RPI excluding mortgage interest payments (RPIX). To view the all-items RPI, please see our data time series section of the inflation and price indices web page. The annual RPI inflation rate was 3.6% in July 2024.

The UK Statistics Authority (The Authority) and HM Treasury launched a consultation in 2020 on The Authority's proposal to address the shortcomings of the RPI. From 2030 (at the earliest), as outlined in The Authority's response to the consultation, the CPIH methods and data sources will be introduced into the RPI. Additionally, the supplementary and lower-level indices of the RPI will be discontinued.

Microdata consultation

From March 2025, we aim to introduce grocery scanner data into headline consumer price inflation (CPI) measures. This will affect the publishing of the consumer prices item indices and price quotes microdata, in part because quote-level microdata for the groceries market will be discontinued. So that we can consider and best meet user needs when making any changes, we are seeking your feedback to better understand how you have used these microdata.

Please share your feedback by completing this short questionnaire, which is open until Wednesday 23 October 2024.

Alternative data sources

We are undertaking a programme of transformation across our consumer price statistics, including identifying new sources, improving methods, and developing systems. More information about the project and our ongoing transformation plans can be found in our updatedResearch and developments in the transformation of UK consumer price statistics article, released on 1 December 2023. The latest release includes information on the transformation of consumer price statistics on secondhand cars and private rents, which we introduced with the February 2024 index, and our proposed approach to outlier detection in grocery scanner data.

As part of our ongoing transformation plans to improve and modernise consumer price statistics, we have updated our transformation overview as of August 2024, as well as publishing our updated development planto outline the rationale for our priorities and their potential impact.

As usual, we welcome your feedback on our work by email tocpi@ons.gov.uk.

Weights for 2024 consumer price inflation statistics

In line with usual practice at the start of each year, the expenditure weights used in compiling the consumer price inflation statistics were updated. For the Consumer Prices Index including owner occupiers' housing costs (CPIH) and the Consumer Prices Index (CPI), they were calculated using national accounts household final consumption expenditure (HHFCE) data for 2022. This is in line with our standard methodology of using data lagged by two years.

It differs from the approach used over the last few years, when there were large changes seen in spending patterns because of the coronavirus (COVID-19) pandemic. Over these years, we adjusted the spending data so that the resulting weights were more reflective of the year immediately before use in consumer price inflation. More information on weights updating is available in our Consumer price inflation, updating weights articles.

The weights for the Retail Prices Index (RPI) were also updated for 2024 in line with the practice followed both before and during the pandemic period, with no additional adjustment to the spending data because of any coronavirus effects.

The weights used to produce the CPI and CPIH have historically been rounded to integers as parts per thousand of the all-items indices. From 2024, we are now using unrounded weights in compiling the indices. The RPI continues to be based on integer weights.

Households and the cost of living

To assist individuals in understanding how the rise in inflation affects their expenditure, we have produced apersonal inflation calculator. The calculator allows users to enter the amount they spend across either a reduced or a wide range of categories, to produce an estimate of their personal inflation based on those spending patterns.

Our shopping prices comparison tool shows how the average prices of items have changed over time. As a result, the number of average price series in Table 55 in our Consumer price inflation dataset has been reduced to two, covering petrol and diesel, and Table 54 has been discontinued. The average price data originally presented in these tables are currently still available as time series on our website and can be found using the four-character identifiers in Table 55.

On 30 May 2024, we published our quarterly Household Costs Indices (HCIs) for UK household groups bulletin. The HCIs reflect how different types of households experience changing prices and differ from CPIH and CPI, which are based on recognised economic principles, and which provide an aggregate measure of inflation for household spending in the UK.

The HCIs are official statistics in development and this release included new estimates for January to March 2024. It was not possible for this latest release to update the weights in January and February 2024 in line with the standard methodology for consumer prices. This is because of delays in processing the underlying survey data and the need for further ongoing quality assurance. Instead, the most recent estimates have been compiled using the weights for February to December 2023. We will provide more information on our plans for updating the HCI weights in due course.

Consumer price inflation historical estimates, UK, 1950 to 1988

On 18 May 2022, we published our Consumer price inflation, historical estimates, UK, 1950 to 1988 - methodology and Consumer price inflation, historical estimates and recent trends, UK: 1950 to 2022 article. These include new estimates of CPIH and improved estimates of CPI for the period 1950 to 1988. These estimates (published in response to user need for a longer series) are indicative and are for analytical purposes only. They are not intended for official use and do not constitute part of the accredited official statistic series.

Previously, in December 2018, we published our Consumer Prices Index including owner occupiers' housing costs (CPIH) historical series: 1988 to 2004 article. This series is also not an accredited official statistic, reflecting the historical uncertainty around the backcasts.

Methodology information

The consumer price indices are normally based on prices collected from outlets around the country, supplemented by information collected centrally over the internet and by phone. The figures in this publication use data collected on or around 9 July 2024.

Our Consumer price indices, a brief guide gives an overview of consumer price statistics, while our Consumer prices indices technical manual covers the concepts and methodologies underpinning the indices in more detail.

Our CPIH Compendium provides a comprehensive source of information on the CPIH, focusing on the approach to measuring owner occupiers' housing costs.

Our Users and uses of consumer price inflation statistics: July 2018 methodology update includes information on the users and uses of these statistics, and the characteristics of the different measures of inflation in relation to potential use.

Strengths and limitations

We explained our approach to Measuring changing prices and costs for consumers and households most recently in December 2023 using three "use cases", and describing how they relate to the measures published and under development.

The three cases refer firstly to the Consumer Prices Index including owner occupiers' housing costs (CPIH) as our lead measure of inflation based on economic principles. They also refer to the Household Costs Indices (HCIs) as a set of measures that reflect the change in costs and prices experienced by different households, and the Retail Prices Index (RPI) as a legacy measure that is required to meet existing user needs. Our Shortcomings of the RPI as a measure of inflation article describes the issues with the RPI.