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Statistical bulletin: Consumer Price Inflation, June 2013 This product is designated as National Statistics

Released: 16 July 2013 Download PDF

Key points

  • The Consumer Prices Index (CPI) grew by 2.9% in the year to June 2013, up from 2.7% in May.
  • The largest upward contributions to the change in the rate came from motor fuels and clothing & footwear.
  • The largest downward contribution came from air transport.
  • The inflation rate is slightly above the figures seen over the previous 12 months but below the levels reached between the start of 2010 and spring 2012.
  • CPIH, the new measure of consumer price inflation including owner occupiers’ housing costs, grew by 2.7% in the year to June 2013, up from 2.5% in May. ONS currently classifies CPIH as an experimental statistic.
  • The slower growth in CPIH than CPI is due principally to owner occupiers’ housing costs increasing more slowly than overall inflation for other consumer goods and services in the year to June.
  • The format of this bulletin changed with the publication of February data. Please see the ‘Guide to Data’ section of the bulletin for further information on where to find all ONS consumer price statistics including CPI, CPIH, RPI and RPIJ. If you have any comments on the new format, please email cpi@ons.gsi.gov.uk.

A brief description of Consumer Price Inflation

Consumer price inflation is the speed at which the prices of goods and services bought by households rise or fall. Consumer price inflation is estimated by using price indices. One way to understand a price index is to think of a very large shopping basket containing all the goods and services bought by households. The price index estimates changes to the total cost of this basket. ONS consumer price indices are published monthly.

A price index can be used to measure inflation in a number of ways. The most common is to look at how the index has changed over a year. This is calculated by comparing the price index for the latest month with the same month a year ago. This is known as the 12-month inflation rate. This bulletin measures inflation to June 2013, so the 12-month rate measures changes in prices between June 2012 and June 2013.

ONS publishes a range of measures of consumer price and other price inflation. A tale of many price indices summarises information on the different measures. 

Consumer Prices Index (CPI)

What is the CPI?

The CPI is a measure of consumer price inflation produced to international standards and in line with European regulations. First published in 1997 as the Harmonised Index of Consumer Prices (HICP), the CPI is the inflation measure used in the Government’s target for inflation.

The CPI is also used for purposes such as uprating pensions, wages and benefits and can aid in the understanding of inflation on family budgets. For more information on the uses of the CPI see How ONS consumer price statistics are used.

Latest Figure and Long-Term Trend

The CPI 12-month rate (the amount prices change over a year) between June 2012 and June 2013 stood at 2.9%. This means that a basket of goods and services that cost £100.00 in June 2012 would have cost £102.90 in June 2013.

The 12-month rate is slightly above the figures seen over the previous 12 months. It is, however, below the levels reached between the start of 2010 and spring 2012 when the rate varied between 3.0% and 5.2%.

Over the last five years, the three main contributors to the 12-month inflation rate have been food & non-alcoholic beverages, housing, water, electricity, gas & other fuels and transport (including motor fuels). Combined, these three sectors have, on average, accounted for over half of the 12-month inflation rate each month.

Figure A below shows the CPI 12-month rate over the last 10 years. Table A below shows the CPI 1-month (the amount prices change between two consecutive months) and 12-month rates and index values for the last year. A larger version of the chart can be viewed by clicking on it (HTML version only). 

Figure A: CPI 12-month rate for the last 10 years: June 2003 to June 2013

United Kingdom

Figure A: CPI 12-month rate for the last 10 years: June 2003 to June 2013
Source: Office for National Statistics

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Table A: CPI index values, 1-month and 12-month inflation rates: June 2012 to June 2013

United Kingdom

  Index1 (UK, 2005 = 100) 1-month rate 12-month rate
2012 Jun 122.3 -0.4 2.4
Jul 122.5 0.1 2.6
Aug 123.1 0.5 2.5
Sep 123.5 0.4 2.2
Oct 124.2 0.5 2.7
Nov 124.4 0.2 2.7
Dec 125.0 0.5 2.7
2013 Jan 124.4 -0.5 2.7
Feb 125.2 0.7 2.8
Mar 125.6 0.3 2.8
Apr 125.9 0.2 2.4
May 126.1 0.2 2.7
Jun 125.9 -0.2 2.9

Table source: Office for National Statistics

Table notes:

  1. All items Consumer Prices Index.

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Consumer Prices Index (CPI): What are the main movements?

This section explains which goods and services had the biggest impact on the change to the 12-month rate between May and June 2013 and (where relevant) considers the longer-term inflationary trends for these goods and services.

The change in the CPI 12-month rate can be calculated by comparing the 12-month rates for two consecutive months. An alternative, and equally valid approach, is to calculate it by comparing the price change between the latest two months and the price change between the same two months a year ago. Explaining the contribution to change in the 12-month rate is a diagrammatic explanation of the calculation.

The CPI fell by 0.2% between May and June 2013, compared with a fall of 0.4% between the same two months in 2012. The 1-month movement was therefore 0.2 percentage points higher this year and this led to the CPI 12-month rate rising from 2.7% in May to 2.9% in June.

Figure B below shows the contributions from each part of the CPI basket of goods and services. A larger version of the chart can be viewed by clicking on it (HTML version only).

The largest upward contributions to the change in the CPI 12-month rate between May and June 2013 came from:

  • clothing & footwear: prices, overall, fell by 1.9% between May and June 2013 compared with a larger fall of 4.2% between the same two months in 2012. Prices usually fall between May and June as the summer sales begin but the fall between those months in 2012 was the largest on record and there were reports of sales starting earlier than in previous years. The main upward effect behind the change in the headline rate came from garments, particularly women’s outerwear and, to a lesser extent, children’s outerwear.

  • transport: prices, overall, rose by 0.1% between May and June 2013 compared with a fall of 0.5% between the same two months a year ago. The upward contribution came principally from motor fuels where prices, overall, rose between May and June this year but fell between the same two months a year ago. Petrol prices rose by 1.0 pence per litre this year, to stand at £1.34 in June, compared with a fall of 4.3 pence per litre, to £1.33, last year. Diesel prices rose by 0.9 pence this year compared with a 4.7 pence fall a year ago. The effect from motor fuels was partly offset by a downward contribution from air transport. Air fares fell by 2.8% on the month this year compared with a rise of 7.4% in 2012. The downward effect came from European and, to a lesser extent, long-haul routes.

There were smaller upward contributions from miscellaneous goods & services (particularly personal care products) and housing, water, electricity, gas & other fuels (particularly domestic heating oil).

The most notable, but relatively small, downward contributions to the change in the CPI 12-month rate between May and June 2013 came from food & non-alcoholic beverages (particularly vegetables and fruit partly offset by meat), recreation & culture (principally package holidays) and furniture, household equipment & maintenance (particularly furniture, furnishings & carpets).

Figure B: Contributions to the change in the CPI 12-month rate: June 2013

United Kingdom

Figure B: Contributions to the change in the CPI 12-month rate: June 2013
Source: Office for National Statistics

Notes:

  1. Individual contributions may not sum to the total due to rounding.
  2. More information on the contents of each group can be found in table 3 at the end of the bulletin.

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Other measures of Consumer Price Inflation

CPIH

CPIH is a new measure of UK consumer price inflation that includes owner occupiers’ housing costs (OOH). These are the costs associated with owning, maintaining and living in one’s own home. CPIH uses an approach called rental equivalence to measure OOH. Rental equivalence uses the rent paid for an equivalent house as a proxy for the costs faced by an owner occupier. In other words this answers the question “how much would I have to pay in rent to live in a home like mine?” for an owner occupier. OOH currently accounts for just over 12% of the expenditure weight of CPIH. This has increased gradually from a weight of 10% in 2005.

Currently, the method of calculation, the population coverage and the basket of goods and services are the same as the Consumer Prices Index (CPI), with the exception of OOH. The method of deriving the weights for CPIH and the data used for these are also the same as for CPI, with the exception of OOH. This can result in some differences from the CPI.

ONS currently classifies CPIH as an experimental statistic. It is being assessed for National Statistics status by the assessment team of the UK Statistics Authority and is not currently a National Statistic. The assessment is expected to be completed by the summer of 2013. For further information on CPIH please see Introducing the new CPIH measure of Consumer Price Inflation, 2005 to 2012.

In June 2013, the 12-month rate (the rate at which prices increased between June 2012 and June 2013) for CPIH stood at 2.7%, up from 2.5% in May.

The difference between the CPI and CPIH annual rates in June 2013 was 0.2 percentage points, the same as in May. Owner occupiers’ housing costs rose by 0.1% between May and June 2013, and also by 0.1% between May and June 2012. The 1-month movement was therefore the same in both years and this meant that OOH had no impact on the change in the overall CPIH 12-month rate between the two months.

Figure C below shows the CPIH and OOH component 12-month rates since January 2006 (the earliest date for which CPIH inflation can be calculated). The CPI 12-month rate has been included for comparative purposes. Table B below shows the CPIH and OOH component 1-month and 12-month rates and index values for the last year. A larger version of the chart can be viewed by clicking on it (HTML version only).

Figure C: CPIH, OOH component and CPI 12-month rates since January 2006

United Kingdom

Figure C: CPIH, OOH component and CPI 12-month rates since January 2006
Source: Office for National Statistics

Notes:

  1. The time series for this chart will be gradually increased up to a time span of ten years as more periods of data become available.
  2. ONS currently classifies CPIH and OOH as experimental statistics. They are not currently National Statistics.

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Table B: CPIH and OOH component index values, 1-month and 12-month rates

United Kingdom

  CPIH Index (UK, 2005 = 100) OOH Index (UK, 2005 = 100) CPIH 1-month1 rate OOH 1-month1 rate CPIH 12-month1 rate OOH 12-month1 rate
2012 Jun 120.6 106.4 -0.4 0.1 2.4 1.2
Jul 120.8 106.5 0.1 0.1 2.5 1.1
Aug 121.3 106.6 0.5 0.1 2.4 1.1
Sep 121.7 106.6 0.3 0.1 2.1 1.1
Oct 122.3 106.7 0.5 0.1 2.5 1.0
Nov 122.5 106.9 0.2 0.1 2.5 1.0
Dec 123.0 107.0 0.4 0.1 2.5 1.0
2013 Jan 122.5 107.2 -0.4 0.2 2.5 1.0
Feb 123.2 107.2 0.6 0.0 2.6 1.0
Mar 123.6 107.2 0.3 0.1 2.6 1.0
Apr 123.8 107.3 0.2 0.1 2.2 1.0
May 124.0 107.4 0.2 0.1 2.5 1.0
Jun 123.8 107.5 -0.2 0.1 2.7 1.0

Table source: Office for National Statistics

Table notes:

  1. CPIH and OOH are currently designated as experimental statistics by ONS. They are not currently National Statistics.

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Retail Prices Index (RPI) and RPIJ

In accordance with the Statistics and Registration Service Act 2007, the Retail Prices Index and its derivatives have been assessed against the Code of Practice for Official Statistics and found not to meet the required standard for designation as National Statistics. The full assessment report can be found on the UK Statistics Authority website.

The RPI is a long-standing measure of UK inflation that has historically been used for a wide range of purposes such as the indexation of pensions and rents and index-linked gilts. For further information on current and historic uses of the RPI please see How ONS consumer price statistics are used.

RPIJ is an improved variant of the Retail Prices Index (RPI) which is calculated using formulae that meet international standards. The primary purpose of RPIJ is to enable users of the RPI to understand the impact the use of the Carli formula (which does not meet international standards) has on the RPI inflation rate.

ONS currently classifies RPIJ as an experimental statistic. It is being assessed for National Statistics status by the assessment team of the UK Statistics Authority, but is not currently a National Statistic. The assessment is expected to be completed by the summer of 2013. For further information on RPIJ please see Introducing the new RPIJ measure of Consumer Price Inflation, 1997 to 2012.

In June 2013, the 12-month rate (the rate at which prices increased between June 2012 and June 2013) for RPIJ stood at 2.7%, up from 2.5% in May 2013. The RPI 12-month rate for June stood at 3.3%, meaning that it was 0.6 percentage points higher than it would have been had it used formulae that meet international standards.

Figure D below shows the RPI and RPIJ 12-month rates for the last 10 years. Over this period the RPIJ 12-month rate has been, on average, 0.5 percentage points lower than the RPI. Cumulatively, inflation as measured by the RPI is 37.7% over this period, compared with 31.4% as measured by the RPIJ. The use of the Carli formula has therefore added 6.3 percentage points to the change in prices over the last 10 years. A larger version of the chart can be viewed by clicking on it (HTML version only).

Table C shows the RPI and RPIJ 1-month and 12-month rates and index values for the last year.

Figure D: RPI and RPIJ 12-month rates for the last 10 years: June 2003 to June 2013

United Kingdom

Figure D: RPI and RPIJ 12-month rates for the last 10 years: June 2003 to June 2013
Source: Office for National Statistics

Notes:

  1. The contents of this chart fall outside the scope of National Statistics. The RPI has been de-designated as a National Statistic and RPIJ is currently designated as an experimental statistic by ONS.

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Table C: RPI and RPIJ index values, 1-month and 12-month rates

United Kingdom

  RPI Index 1 (UK, 1987 = 100) RPIJ Index 1 (UK, 1987 = 100) RPI 12-month1 rate RPIJ 12-month1 rate RPI 1-month1 rate RPIJ 1-month1 rate
2012 Jun 241.8 227.1 2.8 2.2 -0.2 -0.3
Jul 242.1 227.4 3.2 2.5 0.1 0.1
Aug 243.0 228.2 2.9 2.3 0.4 0.4
Sep 244.2 229.2 2.6 2.0 0.5 0.4
Oct 245.6 230.5 3.2 2.6 0.6 0.6
Nov 245.6 230.5 3.0 2.4 0.0 0.0
Dec 246.8 231.5 3.1 2.5 0.5 0.4
2013 Jan 245.8 230.6 3.3 2.7 -0.4 -0.4
Feb 247.6 231.7 3.2 2.6 0.7 0.5
Mar 248.7 232.6 3.3 2.7 0.4 0.4
Apr 249.5 233.2 2.9 2.3 0.3 0.3
May 250.0 233.5 3.1 2.5 0.2 0.1
Jun 249.7 233.2 3.3 2.7 -0.1 -0.1

Table source: Office for National Statistics

Table notes:

  1. The contents of this table fall outside the scope of National Statistics. The RPI has been de-designated as a National Statistic and RPIJ is currently designated as an experimental statistic by ONS.

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For users who want to understand the causes of the difference between the CPI and RPI, please see Table 5 in the Consumer Price Inflation Reference Tables of the June Release on the ONS website. 

Guide to Data

Table D outlines where data for all consumer price inflation statistics can be found.

Table D: Guide to Data

  Statistical Bulletin Detailed Briefing Note Reference Tables (Excel Format) Time Series Dataset
CPI H, T, D H, D H, T, D T, D
CPIY : H H, T T
CPI-CT : H H, T T
CPIH1 H, T, D H H, T, D T, D
CPIHY1 : H H, T T
RPIJ1 H, T H H, T T
RPI2 H, T H, D H, T, D T, D
RPIX2 : H H, T T
RPIY2 : H H, T T
SARPIY2 : H H, T T
TPI2 : H H, T T
RPI Pensioner Indices2 : : H, T T
International Comparisons : : H, T T

Table source: Office for National Statistics

Table notes:

  1. These statistics are currently designated as experimental statistics by ONS.

  2. These statistics are not National Statistics.

  3. H = Latest headline figures, D = Detailed data (including disaggregations), T = Time series data.

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Background notes

  1. Next month

    Consumer price inflation for July 2012 to July 2013 will be published on 13 August 2013.

     

  2. UK Statistics Authority review of consumer price statistics

    On 16 May 2013, the UK Statistics Authority announced the launch of two reviews relating to price indices. The first review will consider what changes are needed to the range of consumer price statistics produced for the UK to best meet current and future needs. The second review will consider matters relating to the governance arrangements and structures supporting the production of consumer price statistics by ONS. For further details please see the UK Statistics Authority website.

  3. CPIH and RPIJ measures of consumer price inflation and the de-designation of RPI as a national statistic

    Two new measures of consumer price inflation, CPIH and RPIJ, were introduced with the February 2013 dataset published on 19 March.

    ONS currently classifies both CPIH and RPIJ as experimental statistics. They are being assessed for National Statistics status by the assessment team of the UK Statistics Authority and are not currently National Statistics. The assessment is expected to be completed by the summer of 2013. For further information on the measures see Introducing the new CPIH measure of Consumer Price Inflation, 2005 to 2012 and Introducing the new RPIJ measure of Consumer Price Inflation, 1997 to 2012.

    In developing her recommendations for RPIJ, the National Statistician noted that there is significant value to users in maintaining the continuity of the existing RPI’s long time series, without any major change, so that it may continue to be used for long-term indexation and for index-linked gilts and bonds in line with user expectations. The UK Statistics Authority accepted this recommendation.

    In accordance with the Statistics and Registration Service Act 2007, the Retail Prices Index and its derivatives have been assessed against the Code of Practice for Official Statistics and found not to meet the required standard for designation as National Statistics. The full assessment report can be found on the UK Statistics Authority website.

  4. Methodology

    The CPI, CPIH, RPIJ and RPI are compiled using the same underlying price data, based on a large and representative selection of almost 700 individual goods and services for which price movements are measured in around 150 randomly selected areas throughout the UK. Around 180,000 separate price quotations are used every month to compile the indices. The outlets in which the prices are collected are selected randomly. Expenditure weights are held constant for one year at a time.

    The selection of goods and services that are priced to compile these indices is reviewed annually. The contents of the 2013 basket are described in an article Consumer Prices Index and Retail Prices Index: the 2013 Basket of Goods and Services (354.4 Kb Pdf) . The expenditure weights used to compile the indices are also updated each year. Additional details of the updated weights for 2013 are available from the National Statistics website in an article published on 26 April 2013 entitled Consumer Prices Index and Retail Prices Index: Updating Weights for 2013.

    Rates of change for the CPI and CPIH are calculated from unrounded index levels, rather than from the published indices, which are rounded to one decimal place. The use of unrounded indices increases the accuracy of the calculation. The unrounded index levels for the CPI are available on request. By contrast, rates of change for the RPI and RPIJ are calculated from the published rounded indices.

  5. Revisions Policy

    CPI indices are revisable although the only time the CPI all items index has been revised was when the index was re-referenced to 2005=100, which took place with the publication of the January 2006 indices.

    ONS currently classifies both CPIH and RPIJ as experimental statistics. They currently follow revisions practices for CPI and RPI and specific policies have yet to be developed.

    Once the RPI indices are published they are never revised.

  6. Comparability

    The CPI’s coverage of goods and services was extended in stages in the areas of health, education, childcare and insurance, with effect from the January 2000, 2001 and 2002 indices. In 2000, there was also a change to the population basis for the weights which was broadened from private households to include expenditure by foreign visitors and residents of institutional households. Further details can be found in a series of articles in the CPI methodology section of the Office for National Statistics website.

    The official CPI series starts in 1996 but estimates for earlier periods are available back to 1988. These estimates are broadly consistent with data from 1996 but should be treated with some caution. Harmonised Index of Consumer Prices: Historical Estimates (106 Kb Pdf) provides more detail. 

    The CPIH’s coverage of goods and services is currently the same as the CPI’s, with the addition of a measure of owner occupiers’ housing costs. A historical series is available back to 2005. Further details can be found in Introducing the new CPIH measure of Consumer Price Inflation, 2005 to 2012.

    RPI data are available back to 1947 but have been re-referenced on several occasions since then, generally accompanied by changes to the coverage and/or structure of the detailed sub-components. Details of these changes are given in Appendices 1 and 2 of the Consumer Price Indices Technical Manual.

    RPIJ data are available back to 1997. Further details can be found in Introducing the new RPIJ measure of Consumer Price Inflation, 1997 to 2012.

  7. Other measures of inflation – main uses and methodological details

    Detailed explanations of the main uses and methodology used to construct the RPI and how it differs from the CPI can be found in Chapter 9 of the Consumer Price Indices Technical Manual. More information on CPIH and RPIJ can be found in the articles linked above. Information on those measures will be added to the Technical Manual when it is next updated. How ONS consumer price statistics are used (67.2 Kb Pdf) provides further details of how consumer price statistics are used more generally.

  8. Accessibility

    The most efficient way to access the latest consumer price inflation data and briefing on the ONS website is via the CPI key figure on the homepage.

    In response to user feedback, all consumer price inflation data are available in one location. The Consumer Price Inflation Reference Tables (1.22 Mb Excel sheet) are provided via an excel file.

    To further help users, very detailed CPI data are now available including the individual price quotes and item indices that underpin the CPI. Please note that the data that are published are at a level which means that no individual retailer or service provider will be able to be identified. The data published covers January 1996 to March 2013. These data are updated once a quarter with around a two month lag with the latest CPI publication. For example, the data will next be updated when the August CPI is published on 17 September 2013, at which point the detailed data published will be extended to June 2013.

    This bulletin includes the June 2013 data, collected on 11 June 2013. Future publication dates (43.6 Kb Pdf) for this statistical bulletin are available to January 2014. 

    Internationally, the CPI is known as the Harmonised Index of Consumer Prices (HICP). HICPs are calculated in each Member State of the European Union according to rules specified in a series of European regulations developed by the European Commission (Eurostat) in conjunction with the EU Member States. Eurostat released figures for the Harmonised Index of Consumer Prices (HICP) for the month of June 2013 for EU Member States, together with an EU average, on 16 July 2013. A summary of the latest European data is available from Eurostat’s database tables. Further information on HICP for the European Union, Eurozone and other EU Member States is available from Eurostat's HICP web page

  9. Further information

    A more detailed quality report (141.9 Kb Pdf) for this statistical bulletin is available. The report assesses consumer price inflation statistics against standard dimensions of quality such as relevance, accuracy and accessibility. The report was last updated in December 2011.

    The mini Triennial Review (1.75 Mb Pdf) of the CPI and RPI Central Collection of Prices is available.

    A full description of how consumer price indices are compiled is given in the Consumer Price Indices Technical Manual. This is supplemented by other technical articles available from the guidance and methodology section of the ONS website. 

    Further information on consumer price inflation statistics, including details of the methodology used to construct the indices, articles, historic data etc, is available on the Consumer Price Indices Taxonomy page.

  10. General

    Details of the policy governing the release of new data are available from the Media Relations Office. Also available is a list of the names of those given pre-release access to the contents of this release.

    Follow us on Twitter or join us at Facebook. View the latest podcasts on YouTube.

    As with all National and candidate National Statistics, the new suite of inflation statistics (CPIH, its derivatives and RPIJ) will be subject to independent assessment by the Authority under the supervision of the Authority’s Head of Assessment. The Board of the Authority has asked for this statutory assessment to be completed by summer 2013. 

    Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed. 

  11. Media contact:

    Tel:  Luke Croydon   + 44 (0) 845 6041858
    Out of hours media line   + 44 (0) 7867 906553
    Email:  media.relations@ons.gsi.gov.uk

    Statistical contact:
    Tel:  Philip Gooding +44 (0) 1633 455896
    Email:  philip.gooding@ons.gsi.gov.uk 
    Email:  cpi@ons.gsi.gov.uk

    CPI/RPI recorded message (available after 9.45am on release day): 
    Tel: + 44 (0) 1633 456961

    CPI/RPI Enquiries:
    Tel: + 44 (0) 1633 456900

  12. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

Statistical contacts

Name Phone Department Email
Philip Gooding +44 (0)1633 455896 Prices, ONS cpi@ons.gsi.gov.uk
Get all the tables for this publication in the data section of this publication .
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