The largest downward pressures to the change in CPI annual inflation between November and December came from petrol, gas and clothing.
The only large upward pressure to the change in CPI annual inflation between November and December came from landline and mobile phone charges.
RPI annual inflation stands at 4.8 per cent in December, down from 5.2 per cent in November. This is the largest fall in annual inflation since between May and June 2009 when the rate fell from -1.1 per cent to -1.6 per cent. The largest downward pressures to the change in RPI annual inflation between November and December 2011 came from petrol, oil & other fuels, gas and clothing & footwear. Partially offsetting these were upward pressures from car insurance and telephone charges. The RPI stands at 239.4 in December 2011 based on January 1987=100.
| Index1 (UK, 2005 = 100) | % change over 1 month | % change over 12 months | ||
|---|---|---|---|---|
| 2010 | Dec | 116.8 | 1.0 | 3.7 |
| 2011 | Jan | 116.9 | 0.1 | 4.0 |
| Feb | 117.8 | 0.7 | 4.4 | |
| Mar | 118.1 | 0.3 | 4.0 | |
| Apr | 119.3 | 1.0 | 4.5 | |
| May | 119.5 | 0.2 | 4.5 | |
| Jun | 119.4 | -0.1 | 4.2 | |
| Jul | 119.4 | 0.0 | 4.4 | |
| Aug | 120.1 | 0.6 | 4.5 | |
| Sep | 120.9 | 0.6 | 5.2 | |
| Oct | 121.0 | 0.1 | 5.0 | |
| Nov | 121.2 | 0.2 | 4.8 | |
| Dec | 121.7 | 0.4 | 4.2 |
| % change | |
|---|---|
| Food & non-alcoholic beverages | 1.4 |
| Alcohol & tobacco | -1.5 |
| Clothing & footwear | -2.8 |
| Housing & household services | 0.2 |
| Furniture & household goods | 1.0 |
| Health | -0.2 |
| Transport | 2.2 |
| Communication | 1.3 |
| Recreation & culture | 0.3 |
| Education | 0.0 |
| Restaurants & hotels | 0.1 |
| Miscellaneous goods & services | 0.3 |
| CPI All Items | 0.4 |
The most significant upward contributions to the 1-month change in the CPI between November and December 2011 came from:
transport: prices, overall, increased by 2.2 per cent. By far the largest upward effect came from a 40.9 per cent rise in air fares (fares usually rise sharply in December due to the Christmas holiday period),
food & non-alcoholic beverages: prices, overall, rose by 1.4 per cent. The largest upward effects came from vegetables where prices rose by 3.7 per cent and fruit, where prices rose by 4.6 per cent, a record for a November to December period.
The most significant downward contributions to the 1-month change in the CPI between November and December 2011 came from:
clothing & footwear: as usual, prices fell between November and December. This year the fall was 2.8 per cent with the downward effects coming from a wide of range of garments.
alcoholic beverages & tobacco: prices, overall, decreased by 1.5 per cent, a record fall between any two months. The largest downward effect came from alcoholic beverages driven by a 3.3 per cent fall in the price of wine (a record fall between any two months) and a 4.4 per cent fall in the price of spirits.
The most significant downward contributions to the change in the CPI 12-month rate between November and December 2011 came from:
transport: prices, overall, rose by 2.2 per cent between November and December this year compared with a record increase (between any two months) of 3.6 per cent a year ago. The largest downward effect came from fuels & lubricants where, reflecting the price of oil, the cost of petrol fell by 1.1 pence per litre between November and December this year compared with an increase of 3.2 pence per litre a year ago. There were also downward effects from:
- air transport: fares rose between November and December this year by 40.9 per cent compared with a rise of 41.8 per cent between the same two months a year ago. The downward contribution was driven by long haul routes,
- sea transport: fares fell by 7.9 per cent between November and December this year but increased by 8.3 per cent between the same two months last year. The downward effect was driven by international routes.
housing & household services: prices, overall, rose by 0.2 per cent between November and December this year compared with an increase of 1.4 per cent a year ago, a record for a November to December period. The largest downward effect came from gas where charges are unchanged between November and December this year but rose by 4.6 per cent a year ago. There were also downward effects from:
- liquid fuels: prices rose by 0.4 per cent between November and December this year compared with an increase of 26.1 per cent a year ago when rising oil prices and shortages due to the poor weather pushed up prices,
- electricity: charges were unchanged between November and December this year but rose by 1.2 per cent a year ago.
clothing & footwear: prices, overall, fell by 2.8 per cent between November and December this year compared with a fall of 1.9 per cent a year ago. The largest downward effect came from women's outerwear.
alcoholic beverages & tobacco: prices, overall, fell by 1.5 per cent between November and December this year (a record fall between any two months) compared with a fall of 0.9 per cent between the same two months a year ago. The largest downward effects came from:
- wine: prices, overall, fell by 3.3 per cent this year (a record fall between any two months) compared with a fall of 1.5 per cent a year ago. There were downward effects from new world and European red wine and new world white wine,
- tobacco: prices, overall, fell by 0.2 per cent between November and December this year compared with an increase of 0.7 per cent a year ago. There were downward effects across all types of cigarettes, cigars and hand-rolling tobacco.
The only significant upward contribution to the change in the CPI 12-month rate between November and December 2011 came from:
communication: prices, overall, rose by 1.3 per cent this year, a record for a November to December period, compared with a fall of 0.3 per cent between the same two months a year ago. The largest upward effects came from landline and mobile phone charges.
| % change | |
|---|---|
| Food & non-alcoholic beverages | 3.8 |
| Alcohol & tobacco | 9.0 |
| Clothing & footwear | 1.8 |
| Housing & household services | 7.9 |
| Furniture & household goods | 4.7 |
| Health | 3.2 |
| Transport | 5.8 |
| Communication | 6.6 |
| Recreation & culture | -0.7 |
| Education | 5.1 |
| Restaurants & hotels | 4.4 |
| Miscellaneous goods & services | 2.7 |
| CPI All Items | 4.2 |
The most significant upward contributions to the CPI 12-month rate to December 2011 came from:
housing & household services which contributed 1.0 percentage points with the main upward effects coming from gas and electricity where charges, overall, rose by 19.8 per cent and 14.1 per cent respectively over the 12 months to December. There was also an upward effect from housing rents, which are 2.9 per cent higher in December 2011 compared with December 2010,
transport which contributed 0.9 percentage points. The largest effects came from fuels & lubricants where prices, overall, rose by 9.4 per cent over the 12 months to December and air transport where fares rose by 5.7 per cent over the same period,
restaurants & hotels which contributed 0.5 percentage points. Here, restaurant & cafe prices, overall, rose by 4.9 per cent over the year,
food & non-alcoholic beverages which also contributed 0.5 percentage points with prices, overall, rising by 3.8 per cent over the year. The upward contributions were widespread with all categories having upward effects; the largest came from meat where prices rose by 5.2 per cent over the 12 months to December, sugar, jam, syrups, chocolate & confectionery where there was a 5.5 per cent rise, bread & cereals with a 3.1 per cent rise, and mineral waters, soft drinks & juices where prices rose by 4.5 per cent.
The CPIY is the same as the all items CPI except that it excludes price changes which are directly due to changes in indirect taxation (such as VAT).
In the year to December, the CPIY rose by 2.8 per cent, down from 3.4 per cent in November. Therefore the CPIY and CPI 12-month rates both fell by 0.6 percentage points between November and December 2011. This is because there were no changes to indirect taxation that impacted on the CPI between November and December.
The CPI-CT is the same as the CPI except that tax rates are kept constant at the rates they were in the base period (currently January 2011).
In the year to December, CPI-CT rose by 2.6 per cent, down from 3.2 per cent in November. The CPI-CT and CPI 12-month rates have therefore both decreased by 0.6 percentage points between November and December. This is because there were no changes to indirect taxation that impacted on the CPI between November and December.
In the year to December the all items RPI rose by 4.8 per cent, down from 5.2 per cent in November. The RPI 12-month rate has therefore decreased by 0.4 percentage points between November and December compared with a fall of 0.6 percentage points in the CPI 12-month rate between the same two months.
The smaller fall in the RPI 12-month rate is mainly due to:
car insurance: has a far higher weight in the RPI than the CPI so the upward effect from this component had a larger impact on the RPI,
sea transport: has a much lower weight in the RPI than the CPI so the downward effect from this component had a smaller impact on the RPI,
air transport: has a lower weight in the RPI than the CPI so the downward effect from this component had a smaller impact on the RPI.
These effects were partially offset by:
liquid fuels: has a higher weight in the RPI than the CPI so the downward effect from this component had a larger impact on the RPI.
The RPIX is the same as the all items RPI except for mortgage interest payments, which is excluded from RPIX.
In the year to December, the RPIX rose by 5.0 per cent, down from 5.3 per cent in November. Therefore the RPIX 12-month rate fell by 0.3 percentage points between November and December compared with a decrease of 0.4 percentage points in the RPI 12-month rate between the same two months.
Mortgage interest payments had a small downward effect on the change in the RPI 12-month rate between November and December. This and the impact of rounding are the reasons for the small difference in the change in the RPIX and RPI 12-month rates between November and December 2011.
The RPIY is the same as the all items RPI except that it excludes price changes which are directly due to changes in indirect taxation (such as VAT) and mortgage interest payments.
In the year to December, the RPIY rose by 3.7 per cent, down from 4.1 per cent in November. Therefore the RPIY and RPI 12-month rates both fell by 0.4 percentage points between November and December. This is because there were no changes to indirect taxation that impacted on the RPI between November and December. Also mortgage interest payments had only a small downward effect on the RPI 12-month rate between November and December and this was not sufficient to cause a divergence between the change in the RPIY and RPI 12-month rates between November and December.
| Annual rate +4.2%, down from +4.8% last month | |
| All items CPI | Also +4.2% in June 2011 |
| Last lower in March 2011 (+4.0%) | |
| Food & non-alcoholic | Annual rate +3.8%, down from +4.0% last month |
| beverages | Lowest since July 2010 (+3.4%) |
| Transport | Annual rate +5.8%, down from +7.2% last month |
| Lowest since November 2010 (+5.1%) | |
| Communication | Annual rate +6.6%, up from +4.9% last month |
| Never higher since official records began in January 1997 |
| Annual rate +4.8%, down from +5.2% last month | |
| All items RPI | Also +4.8% in December 2010 |
| Last lower in November 2010 (+4.7%) | |
| Annual rate +5.0%, down from +5.3% last month | |
| All items RPI exc MIPS (RPIX) | Also +5.0% in July 2011 and June 2011 |
| Last lower in December 2010 (+4.7%) | |
| Food | Annual rate +4.6%, down from +4.9% last month |
| Lowest since October 2010 (+4.2%) | |
| Household services | Annual rate +4.1%, up from +3.3% last month |
| Highest since September 2010 (+4.4%) | |
| Motoring expenditure | Annual rate +6.8%, down from +7.2% last month |
| Lowest since October 2009 (+5.3%) |
Detailed CPI and RPI Reference Tables (1.18 Mb Excel sheet) : This spreadsheet pulls together the tables that were previously published in the old style Consumer Price Indices Statistical Bulletin and Focus on Consumer Prices publication. A correlation index is included to show the old and new naming conventions and where the tables were previously published for example: RPI All items 1947-2011 or RP02 & Table 4.1 in Focus is now the new Table 20.
Two data identifiers have been corrected within table 3 of this file with the publication of the December 2011 CPI and RPI. The identifier for the percentage change over 12 months for gardens, plants & flowers has been corrected to D7J7 (from D7G7) and other services (nec) to D7OB from D7O8. The data descriptions and data are correct as are the data identifiers where these series appear elsewhere within this file and in the time series datasets. ONS apologises for any inconvenience. For further information please contact cpi@ons.gsi.gov.uk.
Processing errors have also been found in the construction of the internal purchasing power of the pound calculations. Only the data for 2010 are affected where the December 2010 RPI index (rather than the average RPI index for 2010) was used in the data calculations. These data have been corrected from the publication of the December 2011 CPI and RPI. The data affected are in table 33 within this file and table 3.7 of the time series datasets; details of the previously published data and the size of the revisions (which are small, between 1 pence and 10 pence) are provided within table 33. ONS apologises for any inconvenience. For further information please contact cpi@ons.gsi.gov.uk.
Following user feedback, detailed tables 1 to 4 have been reattached to the pdf version of the Statistical Bulletin and a further table (a breakdown of the RPI) added.
New ONS website
The most efficient way to access the latest CPI and RPI data and briefing on the new website is via the CPI or RPI key figures on the homepage.
In response to user feedback, we have taken the opportunity to make all CPI and RPI data available in one location. These
detailed CPI and RPI Reference Tables (1.18 Mb Excel sheet)
are provided via a 'printer friendly' 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 September 2011. 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 February CPI is published on 20 March 2012, at which point the detailed data published will be extended to December 2011.
Also following user feedback, detailed tables 1 to 4 have been reattached to the pdf version of the Statistical Bulletin and a further table (a breakdown of the RPI) added.
Further information on the CPI and RPI, including details of the methodology used to construct the indices, articles, historic data etc. is available at on the Consumer Price Index web page.
Measurement of car prices within the CPI and RPI
The UK Statistics Authority has decided to implement a change recommended by the National Statistician's Consumer Prices Advisory Committee (CPAC). This change relates to the measurement methods used for car prices within the CPI and RPI. CPAC recommended that car prices in the CPI and RPI should be measured via transaction prices from car dealer websites instead of the current approach of using 'list' prices. CPAC also recommended that the same method should be used for both the CPI and RPI (currently two different methods are used).
This decision follows a period of public consultation that took place on these proposals between 3 October 2011 and 23 December 2011 in line with the National Statistics Code of Practice. An assessment of the change was also conducted by the Bank of England under the provisions of the relevant part of the Statistics and Registration Service Act 2007.
The improved method will first be used in the construction of the February 2012 CPI and RPI, published on 20 March 2012.
Next month
Update to higher level CPI weights.
In line with usual practice, the January 2012 CPI index will be constructed on updated weights. The weights that will be updated are those at the published level.
Inflation rates for January 2011 to January 2012 will be published on 14 February 2012. CPI and RPI inflation rates between January 2011 and December 2011 were 4.1 per cent and 4.5 per cent respectively. Inflation rates for January 2011 to January 2012 will take account of price changes between December 2011 and January 2012.
Relevance
The CPI is the main UK domestic measure of consumer price inflation for macroeconomic purposes. It forms the basis for the Government's target for inflation that the Bank of England's Monetary Policy Committee (MPC) is required to achieve. From April 2011 the CPI is also being used for the indexation of benefits, tax credits and public service pensions. The uprating is based on the 12-month change in the September CPI.
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 Eurostat in conjunction with the EU Member States. HICPs are used to compare inflation rates across the European Union. Since January 1999, the HICP has also been used by the European Central Bank (ECB) as the measure of price stability across the euro area.
Methodology
The CPI and the RPI are compiled using the same underlying price data, based on a large and representative selection of around 650 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 the CPI and RPI is reviewed annually. The contents of the
2011 basket (265 Kb Pdf)
are available on the ONS website. The expenditure weights used to compile the indices are also updated each year. Additional details of the updated CPI and RPI weights for 2011 are available from the ONS website in an article published on 19 April 2011 entitled Consumer Prices Index and Retail Prices Index:
Updating Weights for 2011 (301.5 Kb Pdf)
.
Rates of change for the CPI 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 are available on request. By contrast, rates of change for the RPI are calculated from the published rounded indices.
Once the RPI indices are published they are never revised. 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.
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.
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.
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
CPI Technical Manual (754.3 Kb Pdf)
.
Other measures of inflation - main uses and methodological details
Detailed explanations on the main uses and methodology used to construct the 'other measures of inflation' included within this statistical bulletin and how they differ from the CPI can be found in Chapter 10 of the
CPI Technical Manual (754.3 Kb Pdf)
In summary:
All items Retail Prices Index (RPI): the RPI is the most long-standing general purpose measure of inflation in the UK. Historically the uses of the RPI include the indexation of various prices and incomes and the uprating of pensions, state benefits and index-linked gilts, as well as the revalorisation of excise duties. Please note, though, that from April 2011 the CPI is being used to uprate benefits, tax credits and public service pensions.
The main differences between the CPI and RPI are:
population base: CPI includes all UK private and institutional households and foreign visitors to the UK. The RPI includes private households only and excludes the highest income households and pensioner households mainly dependent on state benefits; these excluded private households account for around 13 per cent of all UK household expenditure
item coverage: the most significant difference is that the CPI excludes a number of items relating to housing costs (such as mortgage interest payments, house depreciation and council tax) that are included in the RPI
index methodology - formula: the CPI mainly uses the geometric mean whereas the RPI uses the arithmetic mean to combine individual prices at the first stage of aggregation
item coding: the CPI uses a standard international classification system whereas the RPI uses a system unique to itself and not used elsewhere. The different approaches reflect the fact that the CPI is used to compare inflation rates across Europe so a standard framework is required; the RPI is mainly used within the UK only
A breakdown of the differences between the CPI and RPI (62.9 Kb Pdf) annual inflation rates is available on the ONS website.
Also available is an explanation on the increased impact that the different formula used to construct the CPI and RPI (61 Kb Pdf) had on the indices during 2010:
All items Retail Prices Index excluding mortgage interest payments (RPIX): this index is the same as the all items RPI but it excludes the mortgage interest payments component
All items Retail Prices Index excluding mortgage interest payments and indirect taxes (RPIY): is an index designed to measure movements in 'core' prices as the index excludes price changes which are directly due to changes in indirect taxation (for example VAT; excise duties on tobacco, alcohol and petrol; local authority taxation; and vehicle excise duties) and mortgage interest payments. The purpose of the index is to obtain a better indication of inflationary pressures at times when prices are directly influenced by government-driven changes
Consumer Prices Index excluding indirect taxes (CPIY): is an index designed to measure movements in 'underlying prices' as it excludes price changes which are directly due to changes in indirect taxation (for example VAT, excise duties on tobacco, alcohol and petrol). As with the RPIY, its main purpose is to obtain a better indication of inflationary pressures at times when prices are directly influenced by government-driven changes
Consumer Prices Index at constant tax rates (CPI-CT): is an index where tax rates are kept constant at the rates as they were in the base period (currently January 2011). The analytical value of the CPI-CT is when it is compared with the CPI; differences in the monthly and annual rates of change between the two indices provide an indication of the impact of tax changes on the CPI
Accessibility
This bulletin includes the December 2011 data, collected on 13 December 2011. Future publication dates (42.2 Kb Pdf) for this Statistical Bulletin re available on the ONS website. The European Commission (Eurostat) will release figures for the harmonised index of consumer prices (HICP) for the month of December 2011 for EU Member States, together with an EU average, on 17 January 2012. Further information on HICP for the European Union, Eurozone and other EU Member States is available from Eurostat's HICP web page.
A more detailed quality report for this statistical bulletin is available. The report assesses the CPI and RPI against standard dimensions of quality such as relevance, accuracy and accessibility. The report was last updated in December 2011.
The mini Triennial Review (344.9 Kb Pdf) of the CPI and RPI Central Collection of Prices is available on the ONS website.
A full description of how the CPI and RPI are compiled is given in the Consumer Price Indices Technical Manual (754.3 Kb Pdf) .
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-publication access (79 Kb Pdf)
to the contents of this release.
In line with the Consumer Price Indices Pre-Release arrangements, an advanced estimate of the CPI was provided to the Governor of the Bank of England and the Chancellor of the Exchequer 3.5 working days ahead of publication. The Governor shared this information with the MPC, and officials present at the MPC policy meeting, on Wednesday 11 January 2012.
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The National Statistician, Jil Matheson, has announced that the House Price Index currently produced by the Department for Communities and Local Government (and used in the production of the RPI) will transfer to ONS. The transfer is expected to be completed by April 2012. Further details are available in the news release on the UK Statistics Authority website.
National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.
© Crown Copyright 2012.
Next publication:
14 February 2012
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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.
| Name | Phone | Department | |
|---|---|---|---|
| Darren Morgan | +44 (0)1633 455666 | Office for National Statistics | darren.morgan@ons.gsi.gov.uk |
| Philip Gooding | +44 (0)1633 455896 | Office for National Statistics | philip.gooding@ons.gsi.gov.uk |