Consumer Price Inflation UK May 2024 - Inflation Falls To 2%

19th June 2024

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 2.8% in the 12 months to May 2024, down from 3.0% in the 12 months to April.

On a monthly basis, CPIH rose by 0.4% in May 2024, compared with a rise of 0.6% in May 2023.

The Consumer Prices Index (CPI) rose by 2.0% in the 12 months to May 2024, down from 2.3% in the 12 months to April.

On a monthly basis, CPI rose by 0.3% in May 2024, compared with a rise of 0.7% in May 2023.

The largest downward contribution to the monthly change in both CPIH and CPI annual rates came from food, with prices falling this year but rising a year ago; the largest upward contribution came from motor fuels, with prices rising slightly this year but falling a year ago.

Core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.2% in the 12 months to May 2024, down from 4.4% in April; the CPIH goods annual rate fell from negative 0.8% to negative 1.3%, while the CPIH services annual rate eased slightly from 6.0% to 5.9%.

Core CPI (excluding energy, food, alcohol and tobacco) rose by 3.5% in the 12 months to May 2024, down from 3.9% in April; the CPI goods annual rate fell from negative 0.8% to negative 1.3%, while the CPI services annual rate eased from 5.9% to 5.7%.

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 2.8% in the 12 months to May 2024, down from 3.0% in the 12 months to April, 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 May 2024 was the lowest since July 2021, when it was 2.1%.

The monthly CPIH rate in May 2024 was 0.4%, compared with 0.6% a year earlier.

The owner occupiers' housing costs (OOH) component of CPIH rose by 6.7% in the 12 months to May 2024, up from 6.6% in the 12 months to April. 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 0.5% increase between April and May 2023.

The Consumer Prices Index (CPI) rose by 2.0% in the 12 months to May 2024, down from 2.3% in the 12 months to April, 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 May 2024 was the lowest since July 2021, when it was also 2.0%. The rate was last lower in April 2021, when it was 1.5%.

The monthly CPI rate in May 2024 was 0.3%, compared with 0.7% 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.

Notable movements in prices
The easing in the annual inflation rates in May 2024 reflected downward contributions from eight divisions, partially offset by upward contributions from two. The largest downward effects came from food and non-alcoholic beverages, recreation and culture, and furniture and household goods. Transport provided the largest, partially offsetting, upward contribution.

Food and non-alcoholic beverages
Prices of food and non-alcoholic beverages rose by 1.7% in the year to May 2024, down from 2.9% in the year to April. The May figure is the lowest annual rate since October 2021. The rate has eased for the 14th consecutive month from a recent high of 19.2% in March 2023, the highest annual rate seen for over 45 years.

Prices fell by 0.3% between April and May 2024, compared with a monthly rise of 0.9% a year ago. Prices have been relatively high but stable since early summer 2023, compared with sharp rises over the previous 12 months. The annual rate of 1.7% in May 2024 compares with 18.4% in May 2023.

Annual rates eased in 9 of the 11 food and non-alcoholic beverages classes, the exceptions being oils and fats, and milk, cheese and eggs.

The main downward effects came from a combination of bread and cereals, vegetables, and sugar, jam, syrups, chocolate and confectionery. In each case, prices fell between April and May this year, compared with a monthly rise a year ago. The resulting annual rates were the lowest since October 2021 for the first two categories and since June 2022 for sugar, jam, syrups, chocolate and confectionery.

The more detailed products in these categories which contributed to easing rates included breakfast cereals, potato crisps and bars of chocolate.

Recreation and culture
Prices for recreational and cultural goods and services rose by 0.2% between April and May this year, compared with a larger monthly rise of 0.7% a year ago. The annual rate eased to 4.1% in the year to May 2024, down from 4.6% in the year to April. The annual rate in May was equalled in February 2023, and the rate was last lower in January 2022, when it was 2.9%.

The easing in the annual rate between April and May 2024 was the result of small downward effects from a variety of the more detailed classes. The largest came from pets and related products, package holidays, books, and cultural services. Prices of pets and related products, and books fell between April and May this year, compared with a monthly rise a year ago. Prices of package holidays and cultural services rose this year by less than a year ago.

Furniture and household goods
Prices of furniture and household goods overall rose by 0.2% between April and May 2024, compared with a larger monthly rise of 1.1% a year ago. On an annual basis, prices fell by 1.8% in the year to May, compared with a fall of 0.9% in the year to April. The annual rate in May 2024 was the lowest since December 2000.

The main contribution to the easing in the rate came from electrical appliances, where prices fell by 2.5% in the month to May 2024, compared with a monthly rise of 2.2% in May 2023. Prices of most products in this category fell this year but rose a year ago, with the main downward effects coming from vacuum cleaners, fridge freezers and washing machines.

Transport
Overall prices in the transport division rose by 0.3% in the year to May 2024, compared with a fall of 0.1% in the year to April. This is the first annual price rise since October 2023. On a monthly basis, prices rose by 0.7% this year, compared with 0.3% a year ago. The increase in the annual rate was the result of upward effects from motor fuels and, to a lesser extent, transport services, partially offset by lower second-hand car prices.

The average price of petrol rose by 0.7 pence per litre between April and May 2024 to stand at 148.8 pence per litre, up from 144.4 pence per litre in May 2023. Diesel prices fell by 0.8 pence per litre in May 2024 to stand at 156.3 pence per litre, up from 154.6 pence per litre in May 2023. These movements resulted in overall motor fuel prices rising by 2.3% in the year to May 2024, compared with a fall of 0.3% in the year to April.

The small upward effect from transport services resulted from prices rising by more in May 2024 than a year ago. There were small upward contributions from rail, air, and sea fares.

Read the full report from ONS