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Statistical bulletin: Consumer Price Indices, January 2012 This product is designated as National Statistics

Released: 14 February 2012 Download PDF

Consumer Price Indices

  • CPI annual inflation stands at 3.6 per cent in January 2012.
  • RPI annual inflation stands at 3.9 per cent in January 2012.

The headlines for the January 2012 consumer price indices are:

  • A factor from last year - the increase in the standard rate of Value Added Tax in January 2011 to 20 per cent from 17.5 per cent - is a significant contributor to the falls in CPI and RPI annual inflation between December 2011 and January 2012.

    This rise in taxation led to upward pressures on prices between December 2010 and January 2011 (it was estimated to have added 0.76 percentage points to the CPI 1-month change in January 2011), there were, however, no such pressures on prices between December and January this year. This matters as the changes in CPI and RPI annual inflation are calculated by comparing the price changes between the latest two months and the same two months a year ago.
  • CPI annual inflation stands at 3.6 per cent in January 2012, down from 4.2 per cent in December 2011.

    This decrease of 0.6 percentage points in annual inflation follows a fall of 0.6 percentage points between November and December 2011. The only time there has been a larger fall than 1.2 percentage points in annual inflation over a period of two consecutive months was between October and December 2008 when the rate fell by 1.4 percentage points. The CPI stands at 121.1 in January 2012 based on 2005=100.
  • The largest downward pressures to the change in CPI annual inflation between December and January came from fuels & lubricants, products bought in restaurants & cafes, tobacco, vehicle maintenance & repair, the purchase of new vehicles and alcoholic beverages.
  • The largest upward pressures to the change in CPI annual inflation between December and January came from financial services, clothing & footwear, air transport and recording media.
  • RPI annual inflation stands at 3.9 per cent in January 2012, down from 4.8 per cent in December 2011 and the lowest it has been since February 2010 when it stood at 3.7 per cent.

    The largest downward pressures to the change in RPI annual inflation between December 2011 and January 2012 came from motoring expenditure, alcoholic drinks, food and tobacco. There were no large upward pressures. The RPI stands at 238.0 in January 2012 based on January 1987=100.

CPI: Percentage change over 12 months

  

CPI: Percentage change over 12 months

This chart shows the percentage changes over 12 months from January 2010 to January 2012

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CPI indices, 1-month change and 12-month change: January 2011 to January 2012

Consumer Prices Index (CPI), January 2012

United Kingdom

  
  Index1 (UK, 2005 = 100) % change over 1 month % change over 12 months
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
2012 Jan 121.1 -0.5 3.6

Table notes:

  1. All items Consumer Prices Index

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Briefing on the CPI monthly movement between December 2011 and January 2012

1-month change to January 2012

  % change
Food & non-alcoholic beverages -0.4
Alcohol & tobacco 1.9
Clothing & footwear -4.9
Housing & household services 0.2
Furniture & household goods -2.2
Health 0.7
Transport -0.7
Communication -0.3
Recreation & culture 0.0
Education 0.0
Restaurants & hotels 0.0
Miscellaneous goods & service -0.1
CPI All Items -0.5

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Contributions to 1-month percentage change

(total CPI -0.5 per cent)

This chart shows the contributions that attribute to the one month change.

Notes:

  1. Individual contributions may not sum to the total due to rounding.

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The CPI fell by 0.5 per cent between December and January this year compared with a rise of 0.1 per cent a year ago. The 0.5 per cent fall this year is within the normal range for a December to January movement. The rise of 0.1 per cent last year, albeit small, was the only time that prices have increased between these two months. This unusual rise in prices was largely due to the increase in the standard rate of Value Added Tax (VAT) in January 2011 to 20 per cent from 17.5 per cent. It is estimated that this increase in taxation added 0.76 percentage points to the CPI 1-month change between December 2010 and January 2011. Between 1996 and 2010, the 1-month change between December and January has varied between a fall of 0.2 per cent and a fall of 0.9 per cent.

The most significant downward contributions to the 1-month change in the CPI between December 2011 and January 2012 came from:

  • clothing & footwear: where, as usual, prices fell between December and January due to the new year sales. This year the fall was 4.9 per cent with the downward effects coming from a wide of range of garments and types of footwear,

  • furniture & household goods: where, as usual, prices fell between December and January due to the new year sales. This year the fall was 2.2 per cent with the largest downward effect coming from furniture & furnishings,

  • transport: prices, overall, decreased by 0.7 per cent. This fall was driven by air fares which decrease sharply in January following large price increases in December due to the Christmas holiday period. This year fares fell by 28.4 per cent between December and January following an increase of 40.9 per cent between November and December 2011.

The most significant upward contribution to the 1-month change in the CPI between December 2011 and January 2012 came from:

  • alcoholic beverages & tobacco: where, as usual, prices rose between December and January. This year the increase was 1.9 per cent driven by a 4.2 per cent rise in the price of alcoholic beverages where the largest upward effects came from spirits and wine.

Briefing on the change to the CPI 12-month rate between December 2011 and January 2012

Contributions to the change in the 12-month rate

(total CPI -0.6 percentage points)

This chart shows the contributions to the 12 month rate.

Notes:

  1. Individual contributions may not sum to the total due to rounding.

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The change in the CPI 12-month rate is calculated by comparing the price changes between the latest two months and the same two months a year ago. This year the CPI fell by 0.5 per cent between December and January compared with a rise of 0.1 per cent between the same two months a year ago. The 1-month movement was therefore 0.6 percentage points lower this year and this led to the CPI 12-month rate falling from 4.2 per cent in December 2011 to 3.6 per cent in January 2012.

The most significant downward contributions to the change in the CPI 12-month rate between December 2011 and January 2012 came from:

  • transport: prices, overall, fell by 0.7 per cent between December and January this year compared with an increase of 1.0 per cent between the same two months a year ago. The largest downward effects came from fuels & lubricants, the purchase of new cars and vehicle maintenance & repair. In each case, prices rose between December and January this year but by less than between the same two months a year ago:

    - fuels & lubricants: prices rose by 0.5 per cent between December and January this year compared with a record increase (for a December to January period) of 4.4 per cent a year ago,

    - purchase of new cars: prices rose by 0.1 per cent between December and January this year compared with an increase of 2.4 per cent a year ago (the second largest rise between any two months),

    - vehicle maintenance & repair: prices rose by 0.3 per cent between December and January this year compared with an increase of 2.9 per cent a year ago (the second largest rise between any two months).

The increase in VAT in January 2011 contributed to the sharper price rises for these transport costs between December 2010 and January 2011. In addition, an increase in fuel duty and the rising price of crude oil also pushed up the prices of fuels & lubricants last year.

Partially offsetting these downward contributions was an upward effect from air transport where fares fell by less than a year ago for long haul and domestic routes.

  • restaurants & hotels: prices, overall, were little changed between December and January this year compared with a record increase (between any two months) of 1.3 per cent a year ago. The downward contribution was driven by restaurants & cafes where although most products had downward effects, the largest came from alcoholic beverages. The VAT increase in January 2011 was a significant factor in the record price rise for restaurants & hotels between December 2010 and January 2011.

  • alcoholic beverages & tobacco: prices, overall, rose by 1.9 per cent between December and January this year compared with a 4.6 per cent increase a year ago (the second largest rise between any two months). The largest downward effects came from tobacco and spirits where, for both, prices rose between December and January this year but by less than between the same two months a year ago:

    - tobacco: prices rose by 0.1 per cent between December and January this year compared with an increase of 2.9 per cent a year ago (the second largest rise for a December to January period),

    - spirits: prices rose by 6.8 per cent between December and January this year compared with a record increase (between any two months) of 13.5 per cent a year ago.

The VAT increase in January 2011 was a significant factor in the sharper price rises for alcoholic beverages and tobacco between December 2010 and January 2011.

  • housing & household services: prices, overall, rose by 0.2 per cent between December and January this year compared with an increase of 0.6 per cent a year ago. There were small downward effects from electricity and gas where charges were unchanged between December and January this year but rose a year ago. There was also a small downward effect from materials related to the maintenance & repair of the dwelling where prices rose this year between December and January but by less than a year ago (largely due to the VAT increase in January 2011 pushing up prices last year),

  • communication: prices, overall, fell by 0.3 per cent between December and January this year compared with an increase of 1.3 per cent a year ago. There were small downward effects from charges for landline, cable and mobile telephones.

The most significant upward contributions to the change in the CPI 12-month rate between December 2011 and January 2012 came from:

  • financial services: prices, overall, rose by 0.7 per cent between December and January this year compared with a fall of 2.4 per cent a year ago. The largest upward effect came from bank overdraft charges which were unchanged between December and January this year but fell by 12.8 per cent a year ago,

  • clothing & footwear: the January sales were less deep in 2012 compared with 2011 as prices, overall, fell by 4.9 per cent this year between December and January compared with a fall of 5.9 per cent a year ago. This follows, however, deeper sales in December 2011 compared with December 2010 where prices fell by 2.8 per cent between November and December 2011 compared with a fall of 1.9 per cent between the same months in 2010. When taking the price movement between November and January the fall of 7.5 per cent this year is very similar to the fall of 7.6 per cent over the same period last year. There were upward effects from garments, other articles of clothing & clothing accessories and footwear including repairs.

  • recording media: prices, overall, fell by 5.4 per cent between December and January this year compared with a fall of 8.8 per cent a year ago. The largest upward effects came from DVDs and CDs bought via the internet.

Briefing on the CPI 12-month rate to January 2012

12-month rate to January 2012

  % change
Food & non-alcoholic beverages 3.5
Alcohol & tobacco 6.2
Clothing & footwear 2.9
Housing & household services 7.4
Furniture & household goods 4.4
Health 3.2
Transport 4.0
Communication 4.9
Recreation & culture -0.5
Education 5.1
Restaurants & hotels 3.1
Miscellaneous goods & services 2.9
CPI All Items 3.6

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Contributions to 12-month rate

(total CPI 3.6 per cent)

This chart provides the percentage contributions to the 12 month rate

Notes:

  1. Individual contributions may not sum to the total due to rounding.

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The most significant upward contributions to the CPI 12-month rate to January 2012 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 18.7 per cent and 13.2 per cent respectively over the 12 months to January. There was also an upward effect from housing rents, which are 3.0 per cent higher in January 2012 compared with January 2011,

  • transport which contributed 0.6 percentage points. The largest effects came air transport where fares rose by 9.6 per cent over the 12 months to January and fuels & lubricants where prices, overall, rose by 5.3 per cent over the over the same period,

  • food & non-alcoholic beverages which contributed 0.4 percentage points with prices, overall, rising by 3.5 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 5.7 per cent over the 12 months to January, bread & cereals where there was a 3.4 per cent rise, sugar, jam, syrups, chocolate & confectionery with a 4.2 per cent rise, and coffee, tea & cocoa where prices rose by 9.5 per cent,

  • restaurants & hotels which also contributed 0.4 percentage points. Restaurant & cafe prices, overall, rose by 3.5 per cent over the year.

Other measures of CPI inflation

Percentage changes over 12 months

This chart provides a comparison between CPI, CPIY and CPI-CT between January 2010 and January 2012.

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Consumer Prices Index excluding indirect taxes (CPIY)

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 January, the CPIY rose by 3.6 per cent, up from 2.8 per cent in December. The CPIY 12-month rate has therefore increased by 0.8 percentage points between December and January compared with a fall of 0.6 percentage points in the CPI 12-month rate between the same two months. This large difference is mainly due to the VAT increase in January 2011 to 20 per cent, which had an impact on the CPI but not the CPIY in January 2011. This is because the CPIY excludes the impact of indirect taxation (such as VAT) whereas the CPI includes the impact of changes in this form of taxation. These differences in construction led to a 1-month fall in the CPIY between December and January 2011 of 1.3 per cent compared with a rise of 0.1 per cent in the CPI. These differences in the 1-month change a year ago matter as the changes in the CPI and CPIY 12-month rates are calculated by comparing the price changes between the latest two months and the same two months a year ago.

Consumer Prices Index at constant tax rates (CPI-CT)

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 January, the CPI-CT 12-month rate rose by 3.4 per cent, up from 2.6 per cent in December. The CPI-CT 12-month rate has therefore increased by 0.8 percentage points between December and January compared with a fall of 0.6 percentage points in the CPI 12-month rate between the same two months. This large difference is mainly due to the VAT increase in January 2011 to 20 per cent, which had an impact on the CPI but not the CPI-CT in January 2011. This is because tax rates in the calculation of the CPI-CT are kept constant at the rates they were in the base period. In January 2011 the VAT rate used in the calculation of the CPI-CT therefore remained as it stood in January 2010 (the then base period), which was 17.5 per cent. These differences in construction led to a 1-month fall in the CPI-CT between December and January 2011 of 1.2 per cent compared with a rise of 0.1 per cent in the CPI. These differences in the 1-month change a year ago matter as the changes in the CPI and CPI-CT 12-month rates are calculated by comparing the price changes between the latest two months and the same two months a year ago.

RPI compared with CPI

  

RPI compared with CPI

Percentage changes over 12 months

This chart provides a comparison of RPI with CPI between January 2010 and January 2012.

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All items Retail Prices Index (RPI)

In the year to January the all items RPI rose by 3.9 per cent, down from 4.8 per cent in December. The RPI 12-month rate has therefore decreased by 0.9 percentage points between December 2011 and January 2012 compared with a fall of 0.6 percentage points in the CPI 12-month rate between the same two months.

The larger 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 downward effect from this component had a larger impact on the RPI,

  • financial services: have a much lower weight in the RPI than the CPI so the upward effect from this component had a smaller impact on the RPI,

  • petrol & oil: due to the differences in weight this component had in the CPI and RPI in January 2011 (the weight in the RPI was higher) and that the RPI weight is the same this January whereas the CPI weight has decreased. These factors have led to this component having a larger downward effect on the RPI compared with the CPI,

  • food: has a higher weight in the RPI than the CPI so the downward effect from this component had a larger impact on the RPI.

These effects were partially offset by:

  • purchase of new cars: the differences in the methods used to measure prices in the CPI and RPI led to only a negligible effect on the change in RPI 12-month rate but to a large downward effect to the change in the CPI 12-month rate.

Other measures of RPI inflation

Percentage changes over 12 months

This chart provides a comparison between RPI, RPIY and RPIX between January 2010 and January 2012.

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All items Retail Prices Index excluding mortgage interest payments (RPIX)

The RPIX is the same as the all items RPI except for mortgage interest payments, which is excluded from RPIX.

In the year to January, the RPIX rose by 4.0 per cent, down from 5.0 per cent in December. Therefore the RPIX 12-month rate fell by 1.0 percentage points between December and January compared with a decrease of 0.9 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 December and January. 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 December and January.

All items Retail Prices Index excluding mortgage interest payments and indirect taxes (RPIY)

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 January, the RPIY rose by 4.2 per cent, up from 3.7 per cent in December. Therefore the RPIY 12-month rate rose by 0.5 percentage points between December 2011 and January 2012 compared with a fall of 0.9 percentage points in the RPI 12-month rate between the same two months. This large difference is mainly due to the VAT increase in January 2011 to 20 per cent, which had an impact on the RPI but not the RPIY in January 2011. This is because the RPIY excludes the impact of indirect taxation (such as VAT) whereas the RPI includes the impact of changes in this form of taxation. These differences in construction led to a 1-month fall in the RPIY between December and January 2011 of 1.2 per cent compared with a rise of 0.3 per cent in the RPI. These differences in the 1-month change a year ago matter as the changes in RPI and RPIY 12-month rates are calculated by comparing the price changes between the latest two months and the same two months a year ago.

Selected records

Selected CPI Records

All items CPI Annual rate +3.6%, down from +4.2% last month
Lowest since November 2010 (+3.3%)
Food & non-alcoholic Annual rate +3.5%, down from +3.8% last month
beverages Lowest since July 2010 (+3.4%)
Transport Annual rate +4.0%, down from +5.8% last month
Lowest since October 2009 (+3.5%)
All Services Annual rate +3.6%, down from +4.2% last month
Also +3.6% in July 2010
Last lower in May 2010 (+3.4%)

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Selected RPI Records

All items RPI Annual rate +3.9%, down from +4.8% last month
Lowest since February 2010 (+3.7%)
All items RPI exc MIPS (RPIX) Annual rate +4.0%, down from +5.0% last month
Lowest since December 2009 (+3.8%)
Food Annual rate +4.0%, down from +4.6% last month
Also +4.0% in August 2010
Last lower in July 2010 (+3.3%)
Motoring expenditure Annual rate +3.9%, down from +6.8% last month
Lowest since September 2009 (+2.9%)
Leisure Services Annual rate +2.5%, down from +3.0% last month
Also +2.5% in August 2006 and September 2006
Last lower in July 2006 (+2.1%)

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Data tables

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.

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.

Background notes

  1. 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. 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 on the Consumer Price Index page.

  2. New this month

    Update to higher level CPI weights:

    As reported last month, and in line with usual practice, the January 2012 CPI dataset reflects the planned update to the published CPI weights. The new weights can be found in table 3 attached to the PDF version of this bulletin, tables 3 and 10 of the detailed CPI and RPI reference tables and also via table 1.4 of the CPI Time Series datasets.

    UK Statistics Authority Assessment of Consumer Price Indices:

    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 on the UK Statistics Authority website.

    While carrying out the assessment, the team also researched and published Monitoring Brief 7/2010 - Communicating Inflation.

    ONS has previously published a number of articles in response to some of the requirements and suggestions in these reports and is publishing alongside this bulletin a further article Perceptions of Consumer Price Inflation (52.1 Kb Pdf)  and details of the changes, since January 2011, to those who have pre-release access to the CPI and RPI (58.6 Kb Pdf) .

    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.

  3. Next month

    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 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.

    The full response to the public consultation on the measurement of car prices within the CPI and RPI is now available.

    RPI and CPI Weights:

    In line with usual practice, the February 2012 indices will include the planned updates to the higher level RPI weights, and to the CPI and RPI item weights.

    Update to the CPI and RPI Basket:

    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, will be described in an article to be published on the ONS website on 13 March 2012.

    Articles on Consumer Price Inflation:

    Two further articles will be published on 20 March 2012. One will compare and explain the differences between the Consumer Prices Index and the Household Final Consumption Expenditure Implied Deflator constructed as part the National Accounts. The other will examine the impact of using different formulae in the UK CPI and RPI, and compares the effect of doing so with other countries.

    Inflation for February 2011 to February 2012 will be published on 20 March 2012. CPI and RPI inflation rates between February 2011 and January 2012 were 2.8 per cent and 2.9 per cent respectively. Inflation rates for February 2011 to February 2012 will take account of price changes between January 2012 and February 2012.

  4. 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.

  5. 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 described 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.

  6. Reliability

    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. 

  7. 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) .

  8. 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 addition the article How ONS consumer price statistics are used (67.2 Kb Pdf) 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

    A breakdown of the differences between the CPI and RPI (62.9 Kb Pdf) annual inflation rates can be found on the ONS website.

    Also available is an explanation on the increased impact that the different formula used to construct the CPI and RPI 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

  9. Accessibility

    This bulletin includes the January 2012 data, collected on 10 January 2012. Future publication dates (27.6 Kb Pdf) for this Statistical Bulletin are available on the ONS website. The European Commission (Eurostat) will release figures for the harmonised index of consumer prices (HICP) for the month of January 2012 for EU Member States, together with an EU average, on 29 February 2012. Further information on HICP for the European Union, Eurozone and other EU Member States is available from Eurostat's HICP web page.

  10. Further information

    A more detailed quality report (141.9 Kb Pdf) for this statistical bulletin is available on the ONS website. 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 also available.

    A full description of how the CPI and RPI are compiled is given in the Consumer Price Indices Technical Manual.

  11. 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 (58.6 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 8 February 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:
    20 March 2012

    Media contact:
    Tel: Luke Croydon 0845 6041858
    Emergency on-call: 07867 906553
    Email: media.relations@ons.gsi.gov.uk

    Email: cpi@ons.gsi.gov.uk

    CPI/RPI recorded message:
    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
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
Get all the tables for this publication in the data section of this publication .
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