Consumer Price Inflation UK - September 2024 - Falls To 1.7%

16th October 2024

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 2.6% in the 12 months to September 2024, down from 3.1% in August.

On a monthly basis, CPIH rose by 0.1% in September 2024, down from 0.5% in September 2023.

The Consumer Prices Index (CPI) rose by 1.7% in the 12 months to September 2024, down from 2.2% in August.

On a monthly basis, CPI was little changed in September 2024, down from a rise of 0.5% in September 2023.

The largest downward contribution to the monthly change in both CPIH and CPI annual rates came from transport, with larger negative contributions from air fares and motor fuels; the largest offsetting upward contribution came from food and non-alcoholic beverages.

Core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.0% in the 12 months to September 2024, down from 4.3% in August; the CPIH goods annual rate fell from negative 0.9% to negative 1.4%, while the CPIH services annual rate fell from 5.9% to 5.6%.

Core CPI (excluding energy, food, alcohol and tobacco) rose by 3.2% in the 12 months to September 2024, down from 3.6% in August; the CPI goods annual rate fell from negative 0.9% to negative 1.4%, while the CPI services annual rate fell from 5.6% to 4.9%.

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 2.6% in the 12 months to September 2024, down from 3.1% in August and 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 September 2024 was 0.1%, down from 0.5% in September 2023.

The owner occupiers' housing costs (OOH) component of CPIH rose by 7.2% in the 12 months to September 2024, up from 7.1% in the 12 months to August. This is the highest annual rate since March 1992 in the constructed historical series. OOH costs rose by 0.6% on the month, up from 0.5% in September 2023.

The Consumer Prices Index (CPI) rose by 1.7% in the 12 months to September 2024, down from 2.2% in August 2024, 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 was little changed in September 2024, down from 0.5% in September 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 fall in the annual Consumer Prices Index including owner occupiers' housing costs (CPIH) inflation rate in September 2024 reflected offsetting contributions from the different product groups. There were downward contributions from six divisions, most notably transport, offset by upward contributions from four divisions, particularly food and non-alcoholic beverages.

Transport
Overall prices in the transport division fell by 2.4% in the year to September 2024, compared with a rise of 1.2% in the year to August. This is the largest annual price fall since October 2015, when the rate was negative 2.7%. On a monthly basis, prices fell by 3.7% in September 2024 compared with a fall of 0.2% a year ago.

The fall in the annual rate was mainly the result of downward effects from air fares and from motor fuels.

Domestic, European, and long-haul flights saw a fall in monthly price in September 2024, leading to the air fares index falling by 34.8% on the month. This is a lower rate than the 23.2% fall in monthly price in September 2023. Fares usually reduce in price between August and September. However, this was the fifth largest fall since the monthly collection of prices began in 2001. This brought the September 2024 index below where it was in September 2023.

While September 2024 saw a notable monthly fall in price, monthly air fares in August 2024 rose by the second highest amount in August since 2001. This was driven largely by increases in European air fares. In contrast, monthly air fares fell in August 2023, which is only the second time that prices have fallen between July and August. This led to a large rise in the air fares index between August 2023 and August 2024.

The combination of the large rise in the air fares index between August 2023 and August 2024, and the notable fall in the air fares index between September 2023 and September 2024, led to the second largest downward contribution to the change in the 12-month rate for air fares since at least 2002.

For motor fuels, the average price of petrol fell by 5.5 pence per litre between August and September 2024 to stand at 136.8 pence per litre, down from 153.6 pence per litre in September 2023. Diesel prices fell by 6.0 pence per litre in September 2024 to stand at 141.8 pence per litre, down from 157.4 pence per litre in September 2023. These movements resulted in overall motor fuel prices falling by 10.4% in the year to September 2024, compared with a fall of 3.4% in the year to August.

Clothing and footwear
Prices in the clothing and footwear division rose by 0.8% in the year to September 2024, compared with a rise of 1.6% in the year to August. On a monthly basis, prices rose by 2.1% compared with a 2.9% rise a year ago.

The fall in the annual rate was the result of downward effects from garments for women, garments for men, and other articles of clothing. However, these categories were counteracted slightly by a positive contribution from footwear for infants and children.

Food and non-alcoholic beverages
Food and non-alcoholic beverage prices rose by 1.8% in the year to September, up from 1.3% in August 2024. This is the first time since March 2023 that the annual rate of inflation for food and non-alcoholic beverages has strengthened. The annual rate of 1.8% is down from a recent high of 19.2% in March 2023, the highest annual rate seen for over 45 years.

Prices for this division rose by 0.4% between August and September 2024, compared with a fall of 0.1% a year ago. The annual rate of 1.8% in September 2024 compares with 12.2% in September 2023.

There were upward contributions to the change in the annual rate of inflation between August and September 2024 in 3 of the 11 food and non-alcoholic beverages classes because prices rose between August and September this year but fell between the same two months in 2023. These contributions came from:

milk, cheese and eggs

mineral waters, soft drinks, and juices

fruit

The only class with a downward contribution was bread and cereals, while the other seven classes were little changed.

Further details on the items that provided notable upward and downward contributions to the change in the annual rate can be found in our Consumer price inflation detailed briefing note dataset.

The largest upward contributions to the annual CPIH inflation rate in September 2024 came from the housing and household services, restaurants and hotels, and recreation and culture divisions. The contribution from the transport division is the lowest since November 2015 while the contribution from the clothing and footwear division is the lowest since October 2021.

Read the full ONS report HERE