Overall Inflation Rate Down To 8.7% But Food Inflation Barely Falls To 19.1%

24th May 2023

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 7.8% in the 12 months to April 2023, down from 8.9% in March; on a monthly basis, CPIH rose by 1.2% in April 2023, compared with a rise of 2.1% in April 2022.

The Consumer Prices Index (CPI) rose by 8.7% in the 12 months to April 2023, down from 10.1% in March; on a monthly basis, CPI rose by 1.2% in April 2023, compared with a rise of 2.5% in April 2022.

Electricity and gas prices contributed 1.42 percentage points to the fall in annual inflation in April as last April's rise dropped out of the annual comparison, but this component still contributed 1.01 percentage points to annual inflation.

Food and non-alcoholic beverage prices continued to rise in April and contributed to high annual inflation, however, the annual inflation rate of food and non-alcoholic beverages eased, from 19.2% in the year to March 2023, to 19.1% in the year to April 2023.

Core CPI (excluding energy, food, alcohol and tobacco) rose by 6.8% in the 12 months to April 2023, up from 6.2% in March, which is the highest rate since March 1992; the CPI goods annual rate eased from 12.8% to 10.0%, while the CPI services annual rate rose from 6.6% to 6.9%.

Housing and household services
The CPIH annual inflation rate for housing, water, electricity, gas and other fuels was 7.3% in April 2023, down from a peak of 11.8% in January 2023 and from a rise of 11.6% in March 2023. The CPI annual inflation rate for housing, water, electricity, gas and other fuels was 12.3% in April 2023, down from a peak of 26.7% in January 2023 and from a rise of 26.1% in March 2023. This fall is largely because of the upward contribution from the higher April 2022 Office of Gas and Electricity Markets (Ofgem) energy cap dropping out of the annual estimates.

The main driver behind the change was gas, with monthly prices falling by 1.0% between March and April this year, compared with a rise of 66.8% between the same two months a year ago. This was the first time since October 2020 that monthly gas prices fell and meant that gas provided a downward contribution of 0.75 percentage points to the monthly change in CPIH. Electricity also provided a substantial downward contribution with prices falling by 1.1% between March and April this year, compared with a rise of 40.5% between the same two months a year ago. This meant that electricity provided a downward contribution of 0.67 percentage points to the monthly change in CPIH.

Other categories provided an offsetting positive contribution to the monthly change in CPIH. Council tax rose by 5.1% between March and April this year compared with a rise of 3.4% between the same two months a year ago and meant that it provided an upward contribution of 0.04 percentage points to the monthly change in CPIH. Registered social landlord rents rose by 2.2% between March and April this year compared with a 0.03% fall between the same two months a year ago meaning it provided an upward contribution of 0.03 percentage points to the monthly change in CPIH. Finally, sewerage collection rose by 8.0% between March and April this year compared with a rise of 3.3% between the same two months a year ago and meant that it provided an upward contribution of 0.03 percentage points to the monthly change in CPIH.

Food and non-alcoholic beverages
Food and non-alcoholic beverage prices saw a monthly increase of 1.4% compared with a rise of 1.5% in the equivalent time period last year and an annual rise of 19.1% in April 2023 compared with an annual rise of 19.2% in March 2023. Our indicative modelled estimates suggest that the annual rate for this category in April 2023 is the second highest seen for over 45 years, when the rate in August 1977 was estimated to be 21.9%.

Read the full report HERE