Consumer Price Inflation UK - August 2024 - Inflation Steady At 2.2%

18th September 2024

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.1% in the 12 months to August 2024, unchanged from July.

On a monthly basis, CPIH rose by 0.4% in August 2024, the same rate as in August 2023.

The Consumer Prices Index (CPI) rose by 2.2% in the 12 months to August 2024, unchanged from July.

On a monthly basis, CPI rose by 0.3% in August 2024, the same rate as in August 2023.

The largest upward contribution to the monthly change in both CPIH and CPI annual rates came from air fares, which rose this year but fell a year ago; the largest offsetting downward contributions came from motor fuels, and restaurants and hotels.

Core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.3% in the 12 months to August 2024, up from 4.1% in July.

The CPIH goods annual rate fell from negative 0.5% to negative 0.9%, while the CPIH services annual rate rose from 5.7% to 5.9%.
Core CPI (excluding energy, food, alcohol and tobacco) rose by 3.6% in the 12 months to August 2024, up from 3.3% in July.

The CPI goods annual rate fell from negative 0.6% to negative 0.9%, while the CPI services annual rate rose from 5.2% to 5.6%.

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.1% in the 12 months to August 2024, unchanged from July, and down from a recent peak of 9.6% in October 2022.

Our indicative modelled consumer price inflation estimates included in our Consumer price inflation, historical estimates and recent trends article suggest that the October 2022 inflation rate was the highest in over 40 years (the CPIH accredited official statistic series begins in January 2006).

The monthly CPIH rate in August 2024 was 0.4%, the same as in August 2023.

The owner occupiers' housing costs (OOH) component of CPIH rose by 7.1% in the 12 months to August 2024, up from 7.0% in the 12 months to July. This is the highest annual rate since March 1992 in the constructed historical series. OOH costs rose by 0.6% on the month, the same as in August 2023.

The Consumer Prices Index (CPI) rose by 2.2% in the 12 months to August 2024, unchanged from July, 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 monthly CPI rate in August 2024 was 0.3%, the same as in August 2023.

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 unchanged annual inflation rates in August 2024 reflected offsetting contributions from the different product groups. There were upward contributions from three divisions, most notably transport, offset by downward contributions from seven, particularly restaurants and hotels, and alcohol and tobacco.

Transport
Overall prices in the transport division rose by 1.2% in the year to August 2024, compared with a rise of 0.1% in the year to July. This is the largest annual price rise since May 2023, when the rate was 1.3%. On a monthly basis, prices rose by 1.3% in August 2024 compared with a rise of 0.2% a year ago.

The increase in the annual rate was the result of upward effects from air fares and, to a lesser extent, second-hand cars, partially offset by a downward effect from motor fuels.

Air fares rose by 22.2% between July and August 2024. Fares usually rise between these months, but this was the second largest such rise since the monthly collection of prices began in 2001. The increase came principally from European routes.

A year ago, air fares fell by 2.1% between July and August 2023. This was only the second time that fares had fallen between these months; the other occasion was in 2020 when price movements were affected by the coronavirus (COVID-19) pandemic. The fall partially reflected a relatively high July 2023 index, possibly linked to the departure date for flights priced being closer to the school holiday period.

Second-hand car prices rose by 0.1% between July and August 2024, compared with a monthly fall of 1.8% a year ago. On an annual basis, prices fell by 6.6% in the year to August, compared with a fall of 8.4% in the year to July. The annual rate has been negative for 13 consecutive months, though it has grown less negative since May this year.

Within transport, these upward effects were partially offset by a downward effect from motor fuels. The average price of petrol fell by 2.1 pence per litre between July and August 2024 to stand at 142.3 pence per litre, down from 148.5 pence per litre in August 2023. Diesel prices fell by 2.6 pence per litre in August 2024 to stand at 147.8 pence per litre, down from 151.1 pence per litre in August 2023. These movements resulted in overall motor fuel prices falling by 3.4% in the year to August 2024, compared with a rise of 1.8% in the year to July.

Restaurants and hotels
The annual inflation rate for restaurants and hotels was 4.4% in August 2024, down from 4.9% in the year to July, and the lowest rate since July 2021. On a monthly basis, prices fell by 0.7% in August 2024 compared with a smaller 0.1% fall a year ago.

The easing in the annual rate principally reflected a downward effect from restaurants and cafes, where prices rose by 0.2% on the month, less than the 0.8% rise between July and August 2023. The downward contribution was largely driven by pub and restaurant prices for various alcohol products rising by less than a year ago.

Alcohol and tobacco
Prices of alcohol and tobacco overall were little changed between July and August 2024, compared with a rise of 1.5% a year ago. On an annual basis, prices rose by 5.7% in the year to August 2024, down from 7.2% in the year to July, and the lowest annual rate since March 2023.

The contribution to the easing in the rate came from alcohol, where prices fell by 0.2% in the month to August 2024, compared with a rise of 3.0% in August 2023. The rise in August 2023 was influenced by an increase in alcohol duty rates. There was no comparable rise in duty in August 2024.

Read the full ONS report HERE