CPI annual inflation stands at 3.4 per cent in February 2012, down from 3.6 per cent in January. The annual rate for February is the lowest since November 2010. The CPI stands at 121.8 in February 2012 based on 2005=100.
The largest downward pressures to the change in CPI annual inflation between January and February came from domestic electricity and gas, recreation & culture and transport.
The largest upward pressures to the change in CPI annual inflation between January and February came from alcohol off sales and vegetables.
RPI annual inflation stands at 3.7 per cent in February, down from 3.9 per cent in January. The annual rate was last lower in December 2009 though the 3.7 per cent was equalled in January 2010 and February 2010. The largest downward pressures came from motoring expenditure and fuel & light. Partially offsetting these was an upward pressure from alcoholic drink. The RPI stands at 239.9 in February 2012 based on January 1987=100.
|Index1 (UK, 2005 = 100)||% change over 1 month||% change over 12 months|
|Food & non-alcoholic beverages||1.2|
|Alcohol & tobacco||0.8|
|Clothing & footwear||2.9|
|Housing & household services||-0.3|
|Furniture & household goods||1.5|
|Recreation & culture||-0.2|
|Restaurants & hotels||0.4|
|Miscellaneous goods & service||0.6|
|CPI All Items||0.6|
The most significant upward contributions to the 1-month change in the CPI between January and February 2012 came from:
clothing & footwear: where, as usual, prices rose between January and February following the new year sales. This year the rise was 2.9 per cent with the upward effects coming from a wide range of garments, particularly women's outerwear,
food & non-alcoholic beverages: prices, overall, rose by 1.2 per cent. The largest upward effects came from vegetables, where prices rose by 3.3 per cent, and mineral waters, soft drinks & juices, where they rose by 4.3 per cent, a record monthly increase,
transport: prices, overall, rose by 0.6 per cent. By far the largest upward effect came from a 1.3 per cent increase in the price of fuels & lubricants,
furniture, household equipment & maintenance: where prices rose, as usual, between January and February following the new year sales. This year the rise was 1.5 per cent with the largest upward effect coming from furniture & furnishings.
The most significant downward contribution to the 1-month change in the CPI between January and February 2012 came from:
housing & household services: the downward effect came from electricity and gas where average bills fell by 1.3 per cent and 0.9 per cent respectively. This is the first time that electricity prices have fallen in February.
The most significant downward contributions to the change in the CPI 12-month rate between January and February 2012 came from:
housing & household services: prices, overall, fell by 0.3 per cent between January and February this year but rose by 0.3 per cent between the same two months a year ago. The downward effect was driven by electricity and gas where average bills fell this year but rose a year ago.
recreation & culture: prices, overall fell by 0.2 per cent between January and February this year but rose by 0.3 per cent a year ago. The downward effects were widespread with the most significant coming from:
- photographic, cinematographic & optical equipment where prices fell by 9.4 per cent, a record for a January to February period, compared with a fall of 4.4 per cent a year ago. The main effect came from digital cameras,
- pets, related products & services where prices fell by 1.2 per cent, also a record fall for a January to February period, compared with a rise of 0.8 per cent a year ago,
- books, newspapers & stationery where prices rose but by less than a year ago.
transport: the downward effect was driven by air and road transport, partially offset by sea transport:
- air fares fell by 1.6 per cent this year compared with a rise of 2.1 per cent a year ago. The main downward effect came from European routes partially offset by long-haul flights,
- road transport passenger fares rose by less than a year ago,
- sea fares rose by 10.3 per cent this year but fell by 3.6 per cent a year ago.
clothing & footwear: prices, overall, rose by 2.9 per cent between January and February this year compared with a rise of 3.6 per cent between the same two months a year ago. The monthly rise in 2011 was a record for a January to February period. The downward effect came principally from garments.
communication: prices, overall, rose by 0.6 per cent between January and February this year compared with a rise of 1.3 per cent a year ago. The downward effect was driven by mobile phone charges which were little changed this year but rose a year ago.
restaurants and hotels: the largest downward effect came from restaurants and cafes where prices rose by less than a year ago.
The most significant upward contribution to the change in the CPI 12-month rate between January and February 2012 came from:
alcoholic beverages & tobacco: prices, overall, rose by 0.8 per cent between January and February this year compared with a fall of 1.1 per cent between the same two months a year ago. The fall last year was a record for a January to February period. The effect came entirely from alcohol and was led by spirits where prices rose by 2.6 per cent this year but fell by 5.8 per cent a year ago. These movements are a record rise and a record fall respectively for a January to February period.
|Food & non-alcoholic beverages||3.7|
|Alcohol & tobacco||8.3|
|Clothing & footwear||2.2|
|Housing & household services||6.8|
|Furniture & household goods||4.6|
|Recreation & culture||-0.9|
|Restaurants & hotels||2.9|
|Miscellaneous goods & services||2.9|
|CPI All Items||3.4|
housing & household services which contributed 0.9 percentage points with the main upward effects coming from gas, electricity and rent where charges, overall, rose by 17.2 per cent, 10.1 per cent and 3.0 per cent respectively over the 12 months to February,
transport which contributed 0.6 percentage points. The largest effects came from fuels & lubricants where prices, overall, rose by 5.3 per cent over the 12 months to February and air transport where fares rose by 5.7 per cent over the same period,
food & non-alcoholic beverages which contributed 0.4 percentage points with prices, overall, rising by 3.7 per cent over the year. The upward contributions were widespread with almost all categories having upward effects; the largest came from meat where prices rose by 4.4 per cent over the 12 months to February, vegetables where there was a 3.9 per cent rise and sugar, jam, syrups, chocolate & confectionery with a 5.2 per cent rise.
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 February, the CPIY rose by 3.5 per cent, down from 3.6 per cent in January. Therefore the CPIY 12-month rate fell by 0.1 percentage points between January and February compared with a decrease of 0.2 percentage points in the CPI 12-month rate between the same two months. The impact of rounding is the main reason for the small difference in the changes in the CPIY and CPI 12-month rates between January and February. There were no changes to indirect taxation that impacted on the CPI between those months.
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 2012) and vehicle excise duty and television fees are excluded.
In the year to February, CPI-CT rose by 3.2 per cent, down from 3.4 per cent in January. The CPI-CT and CPI 12-month rates have therefore both decreased by 0.2 percentage points between January and February. This is because there were no changes to indirect taxation that impacted on the CPI between January and February.
In the year to February the all items RPI rose by 3.7 per cent, down from 3.9 per cent in January. The RPI and CPI 12-month rates have therefore both decreased by 0.2 percentage points between January and February. Even at the more detailed level the differences in the contributions to the change in the RPI and CPI 12-month rates are relatively small, the largest are:
car insurance: has a far higher weight in the RPI than the CPI so the downward effect from this component had a larger impact on the RPI,
air 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,
house depreciation: had an upward impact on the RPI but is excluded from the CPI.
The RPIX is the same as the all items RPI except for mortgage interest payments, which is excluded from RPIX.
In the year to February, the RPIX rose by 3.8 per cent, down from 4.0 per cent in January. Therefore the RPIX and RPI 12-month rates both fell by 0.2 percentage points between January and February.
Mortgage interest payments had only a negligible impact on the change in the RPI 12-month rate between January and February. This impact was not sufficient to cause a difference between the changes to the RPIX and RPI 12-month rates between these two months.
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 February, the RPIY rose by 4.0 per cent, down from 4.2 per cent in January. Therefore the RPIY and RPI 12-month rates both fell by 0.2 percentage points between January and February. This is because there were no changes to indirect taxation that impacted on the RPI between January and February. Mortgage interest payments also had only a negligible effect on the change in the RPI 12-month rate between the two months.
|All items CPI||Annual rate +3.4%, down from +3.6% last month|
|Lowest since November 2010 (+3.3%)|
|Transport||Annual rate +3.7%, down from +4.0% last month|
|Lowest since October 2009 (+3.5%)|
|Recreation & culture||Annual rate -0.9%, down from -0.5% last month|
|Lowest since December 2008 (-1.2%)|
|Restaurants & hotels||Annual rate +2.9%, down from +3.1% last month|
|Also +2.9% in June 2010|
|Last lower in May 2010 (+2.8%)|
|Annual rate +3.7%, down from +3.9% last month|
|All items RPI||Also +3.7% in February 2010 and January 2010|
|Last lower in December 2009 (+2.4%)|
|Annual rate +3.8%, down from +4.0% last month|
|All items RPI exc MIPS (RPIX)||Also +3.8% in December 2009|
|Last lower in November 2009 (+2.7%)|
|Catering||Annual rate +3.2%, down from +3.5% last month|
|Also +3.2% in August 2010|
|Last lower in July 2010 (+3.1%)|
|Clothing & footwear||Annual rate +9.3%, down from +10.9% last month|
|Lowest since October 2010 (9.2%)|
|Motoring expenditure||Annual rate +3.3%, down from +3.9% last month|
|Lowest since September 2009 (+2.9%)|
|Fares & other travel||Annual rate +5.3%, down from +6.3% last month|
|Lowest since December 2010 (+4.3%)|
Detailed CPI and RPI Reference Tables (1.33 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.
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 (1.33 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. Previously the data published covered January 1996 to September 2011. The data for October to December 2011 are now available. 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 May CPI is published on 19 June 2012, at which point the detailed data published will be extended to March 2012.
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 on the Consumer Price Indices releases 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 of new car prices within the CPI and RPI. CPAC recommended that car prices in the CPI and RPI should be measured using transaction prices from car dealer websites instead of the previous approach of using 'list' prices. CPAC also recommended that the same method should be used for both the CPI and RPI (previously two different methods were 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 has been used in the construction of the February 2012 CPI and RPI.
The full response to the public consultation on the measurement of car prices within the CPI and RPI is available.
RPI and CPI weights
In line with usual practice, the February 2012 indices include the planned updates to the higher level RPI weights, and to the CPI and RPI item weights. The higher level RPI weights are available in table 4 of this Bulletin or table 28 of the detailed CPI and RPI reference tables (1.33 Mb Excel sheet) that accompany this bulletin.
Updating of the CPI and RPI Basket of Goods and Services
The goods and services that are priced to construct the CPI and RPI are reviewed annually to ensure that the indices reflect the latest spending patterns by consumers in the UK. Changes to the basket of goods and services this year, effective from the February indices, were described in an article published on the ONS website on 13 March.
Articles on Consumer Price Inflation
Two further articles have been published on 20 March 2012.
One covers the conceptual and scope differences between the CPI and Household Final Consumption Expenditure Implied Price Deflator (344.9 Kb Pdf) constructed as part of the National Accounts, including an empirical analysis of how and why the two indices differ over time. The conceptual components covered include differences in publication periods and price reference periods. The scope differences examined are collated under four main headings of games of chance, imputed expenditures for owner occupier housing (imputed rents), life insurance and Financial Intermediation Services Indirectly Measured (FISIM).
The second article investigates formula effects' in other countries (152.2 Kb Pdf) inflation measures. There are a number of differences between the CPI and RPI, including their coverage, population base, commodity measurement and methods of construction. Combined, these differences have meant that, for most of its history, the CPI has been lower than the RPI. One of the main reasons for this difference is the method of construction at the lowest level of aggregation, where different formulae are used in the CPI and RPI to combine individual prices. This difference is usually referred to as the formula effect. The second article investigates similar formula effects present in the inflation measures of other countries, and where necessary attempts to explain why the magnitude of the formula effect experienced by other countries differs from that of the UK.
Estimated Effect of the Budget on CPI and RPI
An article describing the estimated effects on the CPI and RPI of any duty and tax changes announced in the Budget will be published on 28 March.
Consumer Price Indices Technical Manual 2012
The 2012 edition of the Consumer Price Indices Technical Manual will be published on 3 April 2012. The Manual has mainly been written in terms of the CPI but covers the concepts underpinning the CPI and RPI, the differences between the indices, the methodologies used, collection and validation of prices, calculation of weights, publication and usage of the different indices.
CPI and RPI Weights
In line with usual practice the CPI and RPI weights were updated with the publication of the January and February datasets. Additional details of the update will be available from the ONS website in an article published on 24 April 2012 entitled Consumer Prices Index and Retail Prices Index: Updating Weights for 2012.
Inflation for March 2011 to March 2012 will be published on 17 April 2012. CPI and RPI inflation rates between March 2011 and February 2012 were each 3.2 per cent. Inflation rates for March 2011 to March 2012 will take account of price changes between February 2012 and March 2012.
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.
The CPI and the 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 the CPI and RPI is reviewed annually. The contents of the 2012 basket are described in an article Consumer Prices Index and Retail Prices Index: the 2012 Basket of Goods and Services (274.7 Kb Pdf) . 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) . An article describing the 2012 weights will be published on 24 April 2012.
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.
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) .
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 addition this article How ONS consumer price statistics are used provides further details on how consumer price statistics are used more generally.
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.
Here is a breakdown of the differences between the CPI and RPI (62.9 Kb Pdf) annual inflation rates.
Also available is an explanation of 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; vehicle excise duty; and television licence fees) 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; vehicle excise duty; and television licence fees). 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 2012) and which excludes vehicle excise duty and television licence fees. 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.
This bulletin includes the February 2012 data, collected on 14 February 2012. Future publication dates (27.6 Kb Pdf) for this Statistical Bulletin are available. The European Commission (Eurostat) release of figures for the harmonised index of consumer prices (HICP) for the month of February 2012 for EU Member States, together with an EU average, on 14 March 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 (141.9 Kb Pdf) 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.
A full description of how the CPI and RPI are compiled is given in the Consumer Price Indices Technical Manual (754.3 Kb Pdf) .
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 (81.9 Kb Pdf) to the contents of this release.
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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.
During 2010, an assessment team from the UK Statistics Authority conducted a review of the Office for National Statistics' Consumer Price Indices. Their remit was to assess compliance with the Code of Practice for Official Statistics. In December 2010, the team published their conclusions as Assessment Report 79.
While carrying out the assessment, the team also researched and published Monitoring Brief 7/2010 - Communicating Inflation.
Following this assessment and ONS's subsequent response, the UK Statistics Authority, on 31 January 2012 confirmed the designation of the CPI and RPI as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Official Statistics.
Designation can be broadly interpreted to mean that the statistics:
meet identified user needs
are well explained and readily accessible
are produced according to sound methods
are managed impartially and objectively in the public interest
Once statistics have been designated as National Statistics it is a statutory requirement that the Code of Practice shall continue to be observed.
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.
17 April 2012
CPI/RPI recorded message: (Available after 9.45am on release day)
Tel 01633 456961
Tel 01633 456900
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: email@example.com
These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.
|Darren Morgan||+44 (0)1633 455666||Office for National Statisticsfirstname.lastname@example.org|
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