Consumer price inflation, UK: November 2022

• The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 9.3% in the 12 months to November 2022, down from 9.6% in October.

• The largest upward contributions to the annual CPIH inflation rate in November 2022 came from housing and household services (principally from electricity, gas, and other fuels), and food and non-alcoholic beverages.

• On a monthly basis, CPIH rose by 0.4% in November 2022, compared with a rise of 0.6% in November 2021.

• The Consumer Prices Index (CPI) rose by 10.7% in the 12 months to November 2022, down from 11.1% in October.

• On a monthly basis, CPI rose by 0.4% in November 2022, compared with a rise of 0.7% in November 2021.

• The largest downward contribution to the change in both the CPIH and CPI annual inflation rates between October and November 2022 came from transport, particularly motor fuels, with rising prices in restaurants, cafes and pubs making the largest, partially offsetting, upward contribution.

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 9.3% in the 12 months to November 2022, down from 9.6% in October, despite a 0.4% rise in the month to November 2022. Although the annual rate eased between October and November 2022, the rates in these months are the highest observed for over 40 years.

The Consumer Prices Index (CPI) rose by 10.7% in the 12 months to November 2022, down from 11.1% in October. The October figure was the highest annual CPI inflation rate in the National Statistic series, which began in January 1997. Indicative modelled consumer price inflation estimates suggest that the CPI rate would have last been higher (than the October 2022 figure) in October 1981, where the estimate for the annual inflation rate was 11.2%. The CPI monthly rate was 0.4% in November 2022, compared with 0.7% in November 2021.

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% 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, and it is covered in more detail in Section 4 in this bulletin, while Section 5 provides commentary on the CPI. Section 3 covers both CPIH and CPI though the figures reflect CPIH.

The easing in the annual inflation rate in November 2022 reflected, principally, price changes in the transport division, particularly for motor fuels and second-hand cars. There were also downward effects from tobacco, accommodation services, clothing and footwear, and games, toys and hobbies. The largest, partially offsetting, upward effect came from price rises for alcohol in restaurants, cafes and pubs.

Transport

The annual inflation rate for transport was 7.6% in November 2022, down for a fifth consecutive month from a peak of 15.2% in June 2022, and the lowest rate since June 2021. The main drivers behind the easing in the rate between October and November 2022 came from motor fuels and second-hand cars.

Overall, fuel prices rose by 17.2% in the year to November 2022, down from 22.2% in the year to October. This is principally a base effect with petrol prices unchanged between October and November this year, but rising by 7.2 pence per litre between the same two months of 2021. Diesel prices also contributed to the change in the rate, rising by 4.0 pence per litre this year, compared with a larger rise of 7.4 pence per litre a year ago. Average petrol and diesel prices stood at 163.6 and 187.9 pence per litre in November 2022, compared with 145.8 and 149.6 pence per litre in November 2021.

Second-hand car prices fell by 5.8% in the year to November 2022, compared with a fall of 2.7% in the year to October. The annual rate has eased for the eighth consecutive month since March 2022, when it was 31.0%. Although prices have fallen (by just under 6%) between March and November this year, much of the change in the annual rate is a base effect as prices rose by over 31% between March and November 2021. During that period, there were reports of increased demand following the coronavirus (COVID-19) pandemic, with a global semiconductor microchip shortage affecting new car production and resulting in some customers switching to the second-hand car market.

Alcohol and tobacco

The annual rate for alcohol and tobacco was 4.2% in November 2022, down from 6.2% in October. The easing in the annual rate was caused by price movements for tobacco. This year, tobacco prices rose by 0.1% on the month, compared with a larger rise of 4.2% a year ago, when duty rates increased as announced in the Autumn 2021 Budget.

Clothing and footwear

Prices of clothing and footwear rose, overall, by 7.5% in the year to November 2022, down from 8.5% in October. On a monthly basis, prices rose by 0.1% between October and November 2022, compared with a larger rise of 1.1% between the same two months a year ago. Prices usually rise into November each year but the increase in 2022 was less than in most recent years, the exception being 2020, when prices fell amid tougher national restrictions on movement because of the coronavirus pandemic.

The downward effect in 2022 was principally from women's clothing, where prices rose by less this year than a year ago. There was also a small downward effect from footwear, with prices falling into November 2022 compared with rises in 2021.

Recreation and culture

The annual rate for recreation and culture was 5.3% in November 2022, down from 5.9% in October. The easing in the rate came almost entirely from games, toys and hobbies, where prices were down by 0.5% in the year to November, compared with a rise of 1.5% in the year to October. The movements in this category largely reflect price changes for computer games, which can sometimes be large, in part depending on the composition of bestseller charts.

Restaurants and hotels

Partially offsetting some of the easing inflation rates previously noted, the annual rate for restaurants and hotels was 10.2% in November 2022, up from 9.6% in October and the highest rate since the constructed historical estimate of 10.5% in December 1991.

The increase in the annual rate reflects price rises between October and November this year, compared with price falls between the same two months in 2021. The upward pressure came from price increases for alcohol served in restaurants, cafes and pubs, particularly for whisky, wine and gin.

Partly offsetting this, prices for accommodation fell between October and November 2022, compared with a rise a year ago, particularly for overnight hotel accommodation.

Food and non-alcoholic beverages

Food and non-alcoholic beverage prices rose by 16.5% in the 12 months to November 2022, slightly up from 16.4% in October. The annual rate of inflation for this category has risen for 16 consecutive months, from minus 0.6% in July 2021. Indicative modelled estimates suggest that the rate would have last been higher in September 1977, when it was estimated to be 17.6%.

The increase in the annual rate for food and non-alcoholic beverages between October and November 2022 was driven by price movements from 4 of the 11 detailed classes. The largest upward effect came from bread and cereals, where prices for bread, overall, rose between October and November 2022 but fell between the same two months in 2021. This was partially offset by a small downward effect from fruit, where prices rose by less this year than a year ago.

Figure 5 shows the annual inflation rates for the Consumer Prices Index including owner occupiers' housing costs (CPIH) all goods and all services series, together with CPIH excluding energy, food, alcohol and tobacco (often referred to as core CPIH). The CPIH inflation rate is added for comparison.

The CPIH all goods index rose by 14.1% in the 12 months to November 2022, down from 14.8% in October. The easing in the rate has been led by a downward contribution to change from motor fuels, with other downward contributions from tobacco, clothing and footwear, and games, toys and hobbies.

The CPIH all services index rose by 5.4% in the 12 months to November 2022, up from 5.3% in October. This is the highest rate since 5.5% was observed in March 1993. The largest upward contribution to the change in the rate between October and November 2022 was from price rises for alcohol served in restaurants, cafes and hotels.

The core CPIH annual rate eased from 5.8% to 5.7% between October and November 2022.

Figure 6 shows how each of the main groups of goods and services contributed to the change in the annual CPIH inflation rate between October and November 2022. To understand what has changed the inflation rate between these months, we can look at the differences between the contributions made by the groups to the rate in October 2022 and the rate in November 2022. Summing the contributions to change across the 12 divisions results in the change to the annual CPIH rate between the latest two months, that is, the easing from 9.6% to 9.3%.

The easing in the annual CPIH rate into November 2022 was driven by downward contributions from 5 of the 12 divisions, led by a notable downward contribution (of 0.18 percentage points) from transport. The majority of this (0.10 percentage points) came from motor fuels. There were further large downward contributions from alcohol and tobacco, clothing and footwear, and recreation and culture. The largest, partially offsetting, upward contribution (of 0.05 percentage points) came from restaurants and hotels, principally from alcohol served in restaurants, cafes and pubs.

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 both the price movement in that category as well as its weight. Contributions help to understand what is driving the inflation rate by expressing it as the additive sum of its parts. For any one month, when added together, the contributions from the 12 divisions sum to the overall CPIH inflation rate, for example, 9.3% in November 2022.

The largest upward contributions to the annual CPIH inflation rate in November 2022 came from housing and household services (principally from electricity, gas, and other fuels), and food and non-alcoholic beverages. Contributions from these two divisions accounted for 5.18 percentage points, over half of the annual CPIH inflation rate. Their combined weight comprises around 41% of the CPIH basket.

The contributions from five of the divisions were the largest since the start of the National Statistics series in 2006. These were food and non-alcoholic beverages (1.51 percentage points), restaurants and hotels (0.93 percentage points), furniture and household goods (0.65 percentage points), miscellaneous goods and services (0.40 percentage points), and health (0.09 percentage points). Additionally, the contribution from housing and household services in November 2022 was joint largest alongside the figure for October 2022.

The Consumer Prices Index (CPI) differs from the CPIH in that it does not include owner occupiers' housing costs (OOH) and Council Tax. Figure 8 shows the contribution of these components to the annual CPIH inflation rate in the context of wider housing-related costs. In November 2022, the contribution of housing and household services in total to the annual CPIH inflation rate was 3.68 percentage points, little changed from October 2022.

The relatively high contribution to the rate since April 2022 came mainly from electricity, gas, and other fuels. This reflects price rises for gas and electricity following the increase in the Office of Gas and Electricity Markets (Ofgem) cap on energy prices on 1 April 2022 and follows an earlier rise in the price cap on 1 October 2021.

From 1 October 2022, the Ofgem energy price cap was replaced with the government's Energy Price Guarantee (EPG). Under the EPG, energy prices increased. However, the rate of increase was reduced by limiting the unit cost of electricity and gas so that a typical household in Great Britain pays, on average, around £2,500 a year on their energy bill.

OOH's contribution to the CPIH annual inflation rate rose from 0.62 to 0.64 percentage points between October and November 2022, increasing the annual rate by 0.02 percentage points. This is a result of costs increasing by 0.4% between October and November 2022, compared with a smaller rise of 0.3% between the same two months a year earlier.

The contribution to the annual rate from Council Tax remains unchanged at 0.10 percentage points in November 2022. This reflects an annual rate of 3.4%.

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, proposed updates: March 2020 article.

Figure 9 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).

Figure 10 shows how each of the main groups of goods and services contributed to the change in the annual CPI inflation rate between October and November 2022.

The easing in the annual CPI rate into November 2022 was driven by contributions from 6 of the 12 divisions, with the largest downward contribution of 0.23 percentage points coming from transport, particularly motor fuels (0.13 percentage points). The largest, partially offsetting upward contribution came from restaurants and hotels (0.06 percentage points). Although the sizes of the contributions differ from CPIH, the main drivers to change are the same where they are common to both measures.

Figure 11 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.

While the CPIH includes extra housing components not included in the CPI, the largest contributions to the annual CPI inflation rate were from the same divisions that made the largest contributions to the annual CPIH rate, namely housing and household services, and food and non-alcoholic beverages.

Figure 12 illustrates CPI inflation against the Group of Seven (G7) countries that produce a comparable measure.

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 indices and their uses, please see our Consumer price indices, a brief guide: 2017 article.

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

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.

Consumer Prices Index

The CPI is a measure of consumer price inflation produced to international standards and in line with European regulations. 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 the accompanying dataset and accompanying data time series.

Retail Prices Index (RPI)

RPI does not meet the required standard for designation as a National 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 14.0% in November 2022.

The UK Statistics 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 UK Statistics Authority 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.

Weights for consumer price inflation statistics

In line with usual practice, the expenditure weights used in compiling the Consumer Prices Index including owner occupiers' housing costs (CPIH) and the Consumer Prices index (CPI) will be updated at the start of 2023. Normally the weights would be updated using the latest Blue Book-consistent household final consumption expenditure (HFCE) dataset, which is lagged by two years. The unprecedented events of the last few years have meant we have adjusted expenditure feeding into the weights update to incorporate some of the larger changes seen in spending patterns, so they are more reflective of the year immediately prior to use in consumer price inflation. More information on these adjustments can be found in Section 2 of our Consumer price inflation, updating weights: 2022 article.

Since consumers' expenditure was affected by the lockdowns that were in place at the start of 2021, we have decided to use the same broad approach for the forthcoming 2023 update of expenditure weights. In particular, we will take into account any continued, large shifts in consumer spending along with international guidance and best practice to adjust expenditure to reflect spending patterns in 2022. We are awaiting the data needed for the analysis, so the precise details have yet to be finalised.

Alternative data sources for rail fares and second-hand cars

We have published an impact analysis of including new alternative data and methods in our headline consumer price statistics for rail fares and second-hand cars. 

We are intending to introduce these changes from February 2023 (published in March 2023). As our highest priorities are improving the quality and upholding the integrity of our statistics, we are currently completing final quality assurance and testing of our systems and processes and, in January 2023, we will publish an update to our timelines for incorporation of these data. 

Although the headline impact is small, with these new data we can produce more granular statistics that offer important insights into the components driving inflation in the UK. We will be publishing six new item-level indices for rail fares by ticket-type, and two new item-level indices for second-hand cars by fuel-type, detailed in our publication.

For our longer-term plans, please see our article on the Transformation of consumer price statistics: April 2022.

Treatment of the Council Tax rebate, Energy Bills Support Scheme (EBSS) and Energy Price Guarantee in consumer price inflation

On 3 February 2022, the UK government announced an Energy Bills Rebate package to help households to manage rising energy bills. On 26 May 2022, the UK government announced an additional cost of living support package. These packages included:

• a £150 non-repayable Council Tax rebate payment for all households that are liable for Council Tax in Bands A to D in England

• a £400 payment to support households with their energy bills through the Energy Bills Support Scheme (EBSS)

Subsequently, on 8 September 2022, the government announced the Energy Price Guarantee that would limit the unit cost of electricity and gas for households.

Decisions on whether to include rebates, subsidies and discounts in our consumer price inflation statistics are not clear cut and are taken on a case-by-case basis. We aim to be consistent with the national accounts, the public sector finances and other economic statistics. Decisions are based on international statistical guidance and practical considerations. More information on this is provided in Section 9.2 of our Consumer Price Indices Technical Manual.

We have previously announced that the Council Tax rebate and EBSS are out of scope of the consumer price indices. The formal Economic Statistics Classification decisions were that they were both current transfers paid by central government to the households sector. As such, both increased household income rather than reduced expenditure. The implication of the decisions was that they were not part of household expenditure and, as a result, out of scope of the consumer price indices.

On 31 October 2022, the Office for National Statistics (ONS) published the conclusion of its classification review of the Energy Price Guarantee (EPG) for domestic consumers. The payments under this scheme have been classified as subsidies on products, paid by central government to the energy suppliers in the non-financial corporations sector in the UK. The implication for consumer price inflation of the classification decision is that the EPG influences the prices that domestic consumers are charged for a unit of gas or electricity. It is these reduced unit prices that are being used in compiling the CPIH, CPI and RPI, which are hence lower while the schemes are in operation than if the EPG had not been introduced.

CPIH-consistent inflation rate estimates for UK household groups: July to October 2022

Every quarter, we publish experimental estimates of inflation rates for different types of households on a CPIH-basis, including for example inflation rates for households in different income deciles, different types of tenure, and retirement status. On 16 November 2022, we published monthly data for Quarter 3 (July to Sept) 2022. For this publication, we additionally extended the time period to incorporate the latest October estimates, as well as producing subgroup estimates on a CPI basis, which brought our analysis from January 2022 up to date. The data release is supported by the Inflation and cost of living for household groups: October 2022 article.

Analysis of lowest-cost grocery items

On 25 October 2022, we published our experimental analysis of price changes for a sample of lowest-cost grocery items, which provided an update to analysis previously published in May 2022. The analysis uses in-house web-scraped data to investigate the price movements for a sample of 30 everyday grocery items (including pasta, rice, milk, and so on), which are commonly bought by households on low incomes.

For each item, we have investigated the change in price of the cheapest product available in online shops up to September 2022.

Personal inflation calculator

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.

If you have any questions or comments on the inflation calculator, please email cpi@ons.gov.uk.

Consumer price inflation historical estimates, UK, 1950 to 1988

On 18 May 2022, we published the Consumer price inflation, historical estimates, UK, 1950 to 1988 - methodology. This includes new estimates of CPIH over the period, and improved estimates of CPI. 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 National Statistic series.

Previously, in December 2018, we published a CPIH historical series covering the period from 1989 to 2005 in the Consumer Prices Index including owner occupiers' housing costs (CPIH) historical series: 1988 to 2004 article. This series is an official statistic rather than a National Statistic, reflecting the historical uncertainty around the back casts.

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 Friday 9 December 2022 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 at Exchange of letters between the Bank of England, HM Revenue and Customs, and ONS for exceptional pre-release access 2022.

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 8 November 2022.

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 includes information on the users and uses of these statistics, and the characteristics of the different measures of inflation in relation to potential use.

We have illustrated our future approach to measuring changing prices and costs faced by consumers and households using three "use cases", along with how they relate to the measures currently published and those under development. We have also published proposed updates in our Measuring changing prices and costs for consumers and households, proposed updates: March 2020 article.

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 to reflect the change in costs as experienced by 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.