Consumer Price Inflation UK - April 2024 - Falls To 2.3%

22nd May 2024

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.0% in the 12 months to April 2024, down from 3.8% in the 12 months to March.

On a monthly basis, CPIH rose by 0.5% in April 2024, compared with a rise of 1.2% in April 2023.

The Consumer Prices Index (CPI) rose by 2.3% in the 12 months to April 2024, down from 3.2% in the 12 months to March.

On a monthly basis, CPI rose by 0.3% in April 2024, compared with a rise of 1.2% in April 2023.

Falling gas and electricity prices resulted in the largest downward contributions to the monthly change in both CPIH and CPI annual rates, while the largest, partially offsetting, upward contribution came from motor fuels, with prices rising this year but falling a year ago.

Core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.4% in the 12 months to April 2024, down from 4.7% in March; the CPIH goods annual rate slowed from 0.9% to negative 0.8%, while the CPIH services annual rate was unchanged at 6.0%.

Core CPI (excluding energy, food, alcohol and tobacco) rose by 3.9% in the 12 months to April 2024, down from 4.2% in March; the CPI goods annual rate slowed from 0.8% to negative 0.8%, while the CPI services annual rate eased slightly, from 6.0% to 5.9%.

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.0% in the 12 months to April 2024, down from 3.8% in the 12 months to March, and 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 annual rate in April 2024 was the lowest since September 2021, when it was 2.9%.

The monthly CPIH rate in April 2024 was 0.5%, compared with 1.2% a year earlier.

The owner occupiers' housing costs (OOH) component of CPIH rose by 6.6% in the 12 months to April 2024, up from 6.3% in the 12 months to March. This is the highest annual rate since July 1992 in the constructed historical series. OOH costs rose by 0.6% on the month, compared with a 0.3% increase between March and April 2023.

The Consumer Prices Index (CPI) rose by 2.3% in the 12 months to April 2024, down from 3.2% in the 12 months to March, 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 annual rate in April 2024 was the lowest since July 2021, when it was 2.0%.

The easing in the annual rate between March and April 2024 was a result of prices rising by 0.3% on the month, compared with a rise of 1.2% 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 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.

Notable movements in prices
The easing in the annual inflation rates in April 2024 principally reflected price changes in the housing and household services division, particularly for gas and electricity. There were also large downward effects from alcohol and tobacco, food and non-alcoholic beverages, recreation and culture, and communication. Restaurants and hotels, and miscellaneous goods and services provided small, partially offsetting, upward contributions.

Housing and household services
Housing and household services prices fell by 0.1% between March and April 2024, compared with a monthly rise of 1.0% a year ago. This resulted in an annual rate of 2.0% in the year to April 2024, down from 3.1% in the year to March. This compares with a recent annual peak of 11.8% in January and February 2023.

The easing in the annual rate reflected large downward effects from gas and electricity, which resulted from the lowering of the Office of Gas and Electricity Markets (Ofgem) energy price cap in April 2024, described on the Ofgem website. Ofgem estimated that for an average household paying by direct debit for dual fuel, this equates to £1,690, a fall of £238 over the course of a year.

Prices of electricity, gas and other fuels fell by 27.1% in the year to April 2024, the largest fall on record, with figures available back to 1989. Gas prices fell by 37.5% on the year, compared with a fall of 26.5% in the year to March 2024, while electricity prices fell by 21.0%, compared with 13.0% in March.

Partially offsetting the downward contribution from gas and electricity, was a small upward effect from owner occupiers' housing (OOH) costs, which rose by 6.6% in the year to April 2024, compared with a rise of 6.3% in the year to March. The OOH annual rate was last higher in July 1992.

Alcohol and tobacco
Prices of alcohol and tobacco overall were little changed between March and April 2024, compared with a rise of 3.6% a year ago. On an annual basis, prices rose by 8.0% in the year to April, down from 11.9% in the year to March.

The main contribution to the easing in the rate came from tobacco, where prices rose by 0.8% in the month to April 2024, compared with a larger rise of 6.9% in April 2023. The rise in April 2023 was influenced by an increase in tobacco duty. There was no rise in duty in April 2024.

Food and non-alcoholic beverages
Prices of food and non-alcoholic beverages rose by 2.9% in the year to April 2024, down from 4.0% in the year to March. The April figure is the lowest annual rate since November 2021. The rate has eased for the 13th consecutive month from a recent high of 19.2% in March 2023, the highest annual rate seen for over 45 years.

Prices rose by 0.3% between March and April 2024, compared with a monthly rise of 1.4% a year ago. Prices have been relatively high but stable since early summer 2023, rising by around 2% between May 2023 and April 2024. This compares with a sharp rise of around 22% seen between March 2022 and May 2023.

The annual rates for most types of food product eased between March and April 2024. The main downward effects came from a combination of bread and cereals, meat, dairy products, vegetables, and soft drinks. In each case, the annual rate was the lowest seen for at least two years.

Overall, the annual rate eased in 8 of the 11 food and non-alcoholic beverages classes, the exceptions being oils and fats, fish, and hot beverages.

Transport
Prices in the transport division fell by 0.1% in the year to April 2024, an unchanged rate from March. The annual rate has been negative for the latest six months. Although the rate was unchanged overall, there were offsetting movements in some of the detailed categories, with upward effects from motor fuels and air fares offset by downward effects from second-hand cars, maintenance and repairs, and other services for personal transport equipment.

The average price of petrol rose by 3.3 pence per litre between March and April 2024 to stand at 148.1 pence per litre, up from 145.8 pence per litre in April 2023. Diesel prices rose by 3.0 pence per litre in April 2024 to stand at 157.1 pence per litre, down from 162.4 pence per litre in April 2023. These movements resulted in overall motor fuel prices falling by 0.3% in the year to April 2024, compared with a fall of 3.7% in March.

The small upward effect from air fares resulted from prices rising by more in April 2024 than a year ago. The effect came principally from European routes.

Second-hand car prices rose by 0.5% between March and April 2024, compared with a larger rise of 2.7% a year ago. On an annual basis, prices fell by 10.0% in the year to April 2024, compared with a fall of 8.1% in the year to March. The annual rate has been negative for nine consecutive months.

Prices of maintenance and repair rose by 0.2% in April 2024, compared with a monthly rise of 2.6% a year ago. This was principally because prices of roadside recovery services fell this year but rose a year ago.

The small downward effect from services for personal transport equipment came from vehicle excise duty, which rose by less this year than a year ago.

Read the full ONS report HERE