The rate of inflation faced by households notably slowed in the year to October 2013. The Consumer Prices Index (CPI) – the headline measure of inflation – grew by 2.2% in the year to October, down from 2.7% in September. This means that a basket of shopping that cost £100.00 in October 2012 would have cost £102.20 in October 2013. CPIH, the new measure which includes the costs owner occupiers’ face in owning, maintaining and living in their own homes, grew by 2.0% down from 2.5% in September. RPIJ, the improved variant of the Retail Prices Index (RPI) calculated using formulae that meet international standards, grew by 1.9% down from 2.5%.
The slowdown in inflation came primarily from price movements in two sectors – transport and education. In the transport sector the main downward contribution came from prices for petrol and diesel, with reports of price cuts at many of the major supermarket chains on the back of decreases in wholesale prices. Air fares and prices for second hand cars also contributed to the slowdown in inflation. The story in the education sector is more complex. Prices, overall, increased this year – with the continuing roll-out of the higher rate of tuition fees. However, as many students are already paying the higher rate of fees, the increase was smaller in percentage terms this year.
Taking a longer term view, the three main contributors to the 12-month inflation rate in the last five years 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.
Source: Office for National Statistics
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