Consumer Price Inflation UK - August 2023 - Marginal Fall To 6.7%

20th September 2023

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 6.3% in the 12 months to August 2023, down from 6.4% in July.

On a monthly basis, CPIH rose by 0.4% in August 2023, compared with a rise of 0.5% in August 2022.

The Consumer Prices Index (CPI) rose by 6.7% in the 12 months to August 2023, down from 6.8% in July.

On a monthly basis, CPI rose by 0.3% in August 2023, compared with a rise of 0.5% in August 2022.

The largest downward contributions to the monthly change in both CPIH and CPI annual rates came from food, where prices rose by less in August 2023 than a year ago, and accommodation services, where prices can be volatile and fell in August 2023.

Rising prices for motor fuel led to the largest upward contribution to the change in the annual rates.

Core CPIH (excluding energy, food, alcohol and tobacco) rose by 5.9% in the 12 months to August 2023, down from 6.4% in July; the CPIH goods annual rate rose slightly from 6.1% to 6.3%, while the CPIH services annual rate slowed from 6.5% to 6.1%.

Core CPI (excluding energy, food, alcohol and tobacco) rose by 6.2% in the 12 months to August 2023, down from 6.9% in July; the CPI goods annual rate rose slightly from 6.1% to 6.3%, while the CPI services annual rate slowed from 7.4% to 6.8%.

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 6.3% in the 12 months to August 2023, down from 6.4% in July, and down from a recent peak of 9.6% in October 2022. Our indicative modelled consumer price inflation estimates suggest that the October 2022 rate was the highest in over 40 years (the CPIH National Statistic series begins in January 2006). The rate in August 2023 was the lowest since March 2022.

The slight easing in the annual rate between July and August 2023 was a result of prices rising by 0.4% on the month compared with a rise of 0.5% a year earlier.

The Consumer Prices Index (CPI) rose by 6.7% in the 12 months to August 2023, down from 6.8% in July, and down from a recent peak of 11.1% in October 2022. Our indicative modelled consumer price inflation estimates suggest that the October 2022 peak was the highest annual inflation rate since 1981 (the CPI National Statistic series begins in January 1997). The rate in August 2023 was the lowest since February 2022.

The easing in the CPI annual rate between July and August 2023 was a result of prices rising by 0.3% on the month compared with a rise of 0.5% a year earlier.

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 16% of the CPIH and is the main driver for differences between the CPIH and CPI inflation rates.

Notable movements in prices
The slight easing in the annual inflation rates in August 2023 principally reflected offsetting contributions across six divisions. Large downward effects from restaurants and hotels, food and non-alcoholic beverages, recreation and culture, and furniture and household goods were partially offset by upward contributions from transport, and housing and household services.

Food Inflation 13.6%
Food and non-alcoholic beverages
Food and non-alcoholic beverage prices rose by 0.3% between July and August 2023, compared with a rise of 1.5% between the same two months a year ago. This resulted in an easing in the annual rate to 13.6% in August 2023, down from 14.9% in July and a recent high of 19.2% in March 2023, which was the highest annual rate seen for over 45 years.

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