Consumer price inflation, UK: August 2024

• The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.1% in the 12 months to August 2024, unchanged from July.
• On a monthly basis, CPIH rose by 0.4% in August 2024, the same rate as in August 2023.

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

• On a monthly basis, CPI rose by 0.3% in August 2024, the same rate as in August 2023.

• The largest upward contribution to the monthly change in both CPIH and CPI annual rates came from air fares, which rose this year but fell a year ago; the largest offsetting downward contributions came from motor fuels, and restaurants and hotels.

• Core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.3% in the 12 months to August 2024, up from 4.1% in July; the CPIH goods annual rate fell from negative 0.5% to negative 0.9%, while the CPIH services annual rate rose from 5.7% to 5.9%.

• Core CPI (excluding energy, food, alcohol and tobacco) rose by 3.6% in the 12 months to August 2024, up from 3.3% in July; the CPI goods annual rate fell from negative 0.6% to negative 0.9%, while the CPI services annual rate rose from 5.2% to 5.6%.

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

Our indicative modelled consumer price inflation estimates included in our Consumer price inflation, historical estimates and recent trends article suggest 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 in August 2024 was 0.4%, the same as in August 2023.

The owner occupiers' housing costs (OOH) component of CPIH rose by 7.1% in the 12 months to August 2024, up from 7.0% in the 12 months to July. This is the highest annual rate since March 1992 in the constructed historical series. OOH costs rose by 0.6% on the month, the same as in August 2023.

The Consumer Prices Index (CPI) rose by 2.2% in the 12 months to August 2024, unchanged from July, 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 August 2024 was 0.3%, the same as in August 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 driver for 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 unchanged annual inflation rates in August 2024 reflected offsetting contributions from the different product groups. There were upward contributions from three divisions, most notably transport, offset by downward contributions from seven, particularly restaurants and hotels, and alcohol and tobacco.

Transport

Overall prices in the transport division rose by 1.2% in the year to August 2024, compared with a rise of 0.1% in the year to July. This is the largest annual price rise since May 2023, when the rate was 1.3%. On a monthly basis, prices rose by 1.3% in August 2024 compared with a rise of 0.2% a year ago.

The increase in the annual rate was the result of upward effects from air fares and, to a lesser extent, second-hand cars, partially offset by a downward effect from motor fuels.

Air fares rose by 22.2% between July and August 2024. Fares usually rise between these months, but this was the second largest such rise since the monthly collection of prices began in 2001. The increase came principally from European routes.

A year ago, air fares fell by 2.1% between July and August 2023. This was only the second time that fares had fallen between these months; the other occasion was in 2020 when price movements were affected by the coronavirus (COVID-19) pandemic. The fall partially reflected a relatively high July 2023 index, possibly linked to the departure date for flights priced being closer to the school holiday period.

Second-hand car prices rose by 0.1% between July and August 2024, compared with a monthly fall of 1.8% a year ago. On an annual basis, prices fell by 6.6% in the year to August, compared with a fall of 8.4% in the year to July. The annual rate has been negative for 13 consecutive months, though it has grown less negative since May this year.

Within transport, these upward effects were partially offset by a downward effect from motor fuels. The average price of petrol fell by 2.1 pence per litre between July and August 2024 to stand at 142.3 pence per litre, down from 148.5 pence per litre in August 2023. Diesel prices fell by 2.6 pence per litre in August 2024 to stand at 147.8 pence per litre, down from 151.1 pence per litre in August 2023. These movements resulted in overall motor fuel prices falling by 3.4% in the year to August 2024, compared with a rise of 1.8% in the year to July.

Restaurants and hotels

The annual inflation rate for restaurants and hotels was 4.4% in August 2024, down from 4.9% in the year to July, and the lowest rate since July 2021. On a monthly basis, prices fell by 0.7% in August 2024 compared with a smaller 0.1% fall a year ago.

The easing in the annual rate principally reflected a downward effect from restaurants and cafes, where prices rose by 0.2% on the month, less than the 0.8% rise between July and August 2023. The downward contribution was largely driven by pub and restaurant prices for various alcohol products rising by less than a year ago.

Alcohol and tobacco

Prices of alcohol and tobacco overall were little changed between July and August 2024, compared with a rise of 1.5% a year ago. On an annual basis, prices rose by 5.7% in the year to August 2024, down from 7.2% in the year to July, and the lowest annual rate since March 2023.

The contribution to the easing in the rate came from alcohol, where prices fell by 0.2% in the month to August 2024, compared with a rise of 3.0% in August 2023. The rise in August 2023 was influenced by an increase in alcohol duty rates. There was no comparable rise in duty in August 2024.

Figure 5 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 4.3% in August 2024, up from 4.1% in July, but down from a recent high of 6.5% in May 2023. This 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 0.9% in the 12 months to August 2024, compared with a fall of 0.5% in the 12 months to July. The largest downward contributions to the change in the annual rate came from energy, particularly motor fuels, and from alcoholic beverages and tobacco.

The CPIH all services index rose by 5.9% in the 12 months to August 2024, up from 5.7% in July. The largest upward contribution to the change in the annual rate came from transport services, particularly air fares.

Figure 6 shows the contributions from the 12 divisions to the change in the annual CPIH inflation rate between July and August 2024. These sum to the change in the annual rate between the latest two months, that is, no change with the rate remaining at 3.1%.

The contributions to change between the two months offset each other, with upward contributions from three divisions and downward contributions from seven divisions. The largest upward contribution came from transport, principally from air fares and partially offset by motor fuels. The largest downward contributions came from restaurants and hotels, and from alcohol and tobacco.

Figure 7 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 August 2024 came from housing and household services, restaurants and hotels, and recreation and culture. Although the contribution from restaurants and hotels was the second largest this month, it was still the smallest from that division since February 2022.

The only negative contribution to the annual CPIH inflation rate came from furniture and household goods. This was the sixth consecutive negative contribution from this division.

The contribution from food and non-alcoholic beverages eased for the 17th consecutive month, from a recent high of 1.76 percentage points in March 2023 to 0.13 percentage points in August 2024. This was the smallest contribution from this division since October 2021.

Figure 8 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 rose slightly from 1.13 to 1.14 percentage points between July and August 2024, while the contribution from Council Tax was unchanged at 0.14 percentage points. However, the contribution from housing and household services overall eased slightly from 1.11 to 1.10 percentage points as a result of a downward contribution to change from liquid fuels.

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 9 shows CPI inflation for the UK against the European Union (EU) average and selected Group of Seven (G7) countries. While the UK CPI is produced on a comparable basis with EU countries, the United States Harmonised Index of Consumer Prices (HICP) measure differs in some respects (see Footnote 1 of Figure 9). The UK's CPI inflation rate of 2.2% equalled the first (or "flash") estimate of inflation for France and was slightly above that for Germany (2.0%) in the 12 months to August 2024.

Figure 10 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 3.6% in the year to August 2024, up from 3.3% in July 2024 but 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 0.9% in the year to August 2024, compared with a fall of 0.6% in the year to July. The CPI all services index rose by 5.6% in the year to August 2024, up from 5.2% in July but 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 drivers 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 drivers 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 July and August 2024.

The contributions to change between the two months offset each other, with upward contributions from three divisions and downward contributions from seven divisions. The largest upward effect came from transport, principally from air fares and partially offset by motor fuels. The largest downward effects came from restaurants and hotels, and from alcohol and tobacco.

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

Figure 12 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 August 2024, the largest-contributing division to CPI was restaurants and hotels (0.62 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 from housing and household services, but in CPIH, these were more than offset by upward contributions from OOH and, to a lesser extent, Council Tax.

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.

CPIH

The Consumer Prices Index including owner occupiers' housing costs (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 significant expenses for many households and are not included in the CPI.

CPI

The CPI is a measure of consumer price inflation produced to international standards and is based on European regulations for the 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 (OOH) costs

OOH costs are the costs of housing services associated with owning, maintaining and living in one's own home.

RPI

The Retail Prices Index (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 the data time series section of the inflation and price indices area of our website. The annual RPI inflation rate was 3.5% in August 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 price inflation 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 Research and developments in the transformation of UK consumer price statistics article, released on 1 December 2023. This includes information on the transformation of consumer price statistics on second-hand 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 plans, we updated our transformation overview on 6 August 2024, as well as publishing our updated development plan to outline the rationale for our priorities and their potential impact.

As usual, we welcome your feedback on our work by email to cpi@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 in March 2024. 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 a personal 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 28 August 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 April to June 2024. It was not possible for this latest release to update the weights for 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 aim to update the weights once the underlying survey data become available.

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.

Pre-release access

The Bank of England was granted exceptional pre-release access to an estimate of consumer price inflation data at 8:30am on Monday 16 September 2024 so that the data were available for the Monetary Policy Committee meeting held on that day. The letters requesting and agreeing to pre-release are available in the Exchange of letters between the Bank of England and the Office for National Statistics for exceptional pre-release access to the Consumer Prices Index and Labour Market Statistics.

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 13 August 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 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 illustrated our approach to Measuring changing prices and costs for consumers and households most recently in December 2023 using three "use cases", and described 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.

Accredited official statistics

These accredited official statistics were independently reviewed by the Office for Statistics Regulation in July 2017. They comply with the standards of trustworthiness, quality and value in the Code of Practice for Statistics and should be labelled "accredited official statistics".