CPI annual inflation stands at 2.4 per cent in June 2012, down from 2.8 per cent in May. This is the third month in a row that the annual rate has fallen. It is now at its lowest since November 2009, when it was 1.9 per cent. The CPI stands at 122.3 in June 2012 based on 2005=100.
The largest downward pressures to the change in CPI annual inflation between May and June came from clothing & footwear, transport and food & non-alcoholic beverages.
The largest upward pressure to the change in CPI annual inflation between May and June came from recreation & culture where prices, overall, for audio-visual equipment has risen on the month.
RPI annual inflation stands at 2.8 per cent in June 2012, down from 3.1 per cent in May. The annual rate is the lowest since December 2009. The largest downward pressures came from motor fuels, food, plus clothing & footwear. Leisure goods and housing were the largest upwards pressures. The RPI stands at 241.8 in June 2012 based on January 1987=100.
|Index1 (UK, 2005 = 100)||% change over 1 month||% change over 12 months|
|Food & non-alcoholic beverages||-0.1|
|Alcohol & tobacco||-0.5|
|Clothing & footwear||-4.2|
|Housing & household services||-0.1|
|Furniture & household goods||0.0|
|Recreation & culture||0.1|
|Restaurants & hotels||0.0|
|Miscellaneous goods & services||-0.3|
|CPI All Items||-0.4|
The CPI fell by 0.4 per cent between May and June this year. This is the largest fall in prices between a May and June since the CPI was launched in 1996 and the first time since the start of 2009 where prices have, overall, fallen for two consecutive months. Between 1996 and 2011, the one-month change between May and June has varied between a fall of 0.2 per cent and a rise of 0.7 per cent.
The most significant downward contributions to the 1-month change in the CPI between May and June 2012 came from:
clothing & footwear: prices, overall, fell by 4.2 per cent. This is twice as large a fall as the next biggest between these two months since the CPI was launched in 1996. Downward effects came from across the clothing & footwear sector, with reports of summer sales starting earlier than last year.
transport: prices, overall, fell by 0.5 per cent. The largest downward pressure came from motor fuels. Petrol prices fell by 4.3 pence per litre on the month to stand at £1.33 per litre. Diesel prices fell by 4.7 pence per litre to stand at £1.39 per litre.
There were no significant upward contributions to the 1-month change in the CPI between May and June 2012.
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 0.4 per cent between May and June compared with a fall of 0.1 per cent between the same two months a year ago. The 1-month movement was therefore 0.3 percentage points lower this year and this led to the CPI 12-month rate falling from 2.8 per cent in May to 2.4 per cent in June 2012. The 0.1 percentage point difference is due to rounding.
The most significant downward contributions to the change in the CPI 12-month rate between May and June 2012 came from:
clothing & footwear: prices, overall, fell by 4.2 per cent between May and June 2012 compared with a fall of 1.9 per cent between the same two months a year ago. Downward effects came from across the clothing sector (with the notable exception of football shirts which had an upward effect), with reports of the summer sales starting earlier than last year. Footwear had a small upward effect with prices, overall, decreasing at a slower rate than the same time last year.
transport: prices, overall, fell by 0.5 per cent between May and June this year compared with a rise of 0.3 per cent between the same two months a year ago. The main downward pressure came from fuels & lubricants, with petrol and diesel prices falling for a second successive month. Transport services (such as air travel) had a small downward effect, with prices rising more slowly than a year ago. The purchase of vehicles had a small upward effect with prices, overall, falling at a slower rate than a year ago.
food & non-alcoholic beverages: prices, overall, fell by 0.1 per cent between May and June this year compared with a rise of 0.9 per cent a year ago. With the exception of fruit and vegetables, all food types contributed to the downward pressure. The biggest contribution came from meat, where there have been reports of the recent weather hampering demand. Non-alcoholic beverages had a small upward effect, principally from tea bags and fruit drinks, where prices recovered from sales last month.
miscellaneous goods & services: prices, overall, fell by 0.3 per cent between May and June this year compared with a negligible increase in prices a year ago. Downward contributions from personal care products (notably deodorant and sunscreen), insurance and other services outweighed an upward contribution from financial services.
The only significant upward contribution to the change in the CPI 12-month rate between May and June 2012 came from:
recreation & culture: there were upward effects from across this sector, with the largest coming from audio visual equipment and related products, most notably digital cameras, where this month prices are falling more slowly than a year ago.
|Food & non-alcoholic beverages||2.3|
|Alcohol & tobacco||4.8|
|Clothing & footwear||-0.8|
|Housing & household services||6.0|
|Furniture & household goods||3.5|
|Recreation & culture||0.3|
|Restaurants & hotels||3.1|
|Miscellaneous goods & services||1.9|
|CPI All Items||2.4|
The most significant upward contributions to the CPI 12-month rate to June 2012 came from:
housing & household services: which contributed 0.8 percentage points, with the main upward effects coming from gas, electricity and rent, where charges, overall, rose by 15.4 per cent, 8.0 per cent and 3.3 per cent respectively.
restaurants & hotels: which contributed 0.4 percentage points, with the main upward effect coming from catering.
food & non-alcoholic beverages: which contributed 0.3 percentage points, with prices, overall, rising by 2.3 per cent over the year. There were upward contributions from all categories, with the exception of oils & fats. The largest contributions came from meat, with a 2.8 per cent rise, and sugar, jam, syrups, chocolate & confectionery, where prices rose by 3.9 per cent over the year.
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 June, the CPIY rose by 2.4 per cent, down from 2.7 per cent in May. Therefore, the CPIY 12-month rate fell by 0.3 percentage points between May and June compared with a decrease of 0.4 percentage points in the CPI 12-month rate between the same two months. The impact of rounding is the reason for the small difference in the changes in the CPIY and CPI 12-month rates between May and June. 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 licence fees are excluded.
In the year to June, CPI-CT rose by 2.2 per cent, down from 2.5 per cent in May. Therefore, the CPI-CT 12-month rate fell by 0.3 percentage points between May and June compared with a decrease of 0.4 percentage points in the CPI 12-month rate between the same two months. The impact of rounding is the reason for the small difference in the changes in the CPI-CT and CPI 12-month rates between May and June. There were no changes to indirect taxation that impacted on the CPI between those months.
In the year to June, the all items RPI rose by 2.8 per cent, down from 3.1 per cent in May. The RPI 12-month rate has therefore decreased by 0.3 percentage points between May and June compared with a fall of 0.4 percentage points in the CPI 12-month rate between the same two months.
The smaller fall in the RPI 12-month rate than the CPI 12-month rate is mainly due to:
clothing & footwear: has a lower weight in the RPI than the CPI, so the downward effect from this component had a smaller impact on the RPI,
rounding: this emphasises the downward movement in the CPI compared with the downward movement in the RPI,
air transport: has a lower weight in the RPI than the CPI, so the downward effect this has on the CPI component has a negligible impact on the RPI,
house depreciation: is not included in the CPI, so the upward effect from this component on the RPI had no impact on the CPI.
These factors were partially offset by:
motor fuels: prices are collected in the middle of the month for the RPI but are averaged across the month for the CPI. This resulted in a larger downward effect on the RPI than the CPI,
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.
The RPIX is the same as the all items RPI except for mortgage interest payments, which are excluded from RPIX.
In the year to June, the RPIX rose by 2.8 per cent, down from 3.1 per cent in May. Therefore the RPIX and RPI 12-month rates both fell by 0.3 percentage points between May and June.
Mortgage interest payments had only a small upward impact on the change in the RPI 12-month rate between May and June. 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 June, the RPIY rose by 2.9 per cent, down from 3.2 per cent in May. Therefore the RPIY and RPI 12-month rates both fell by 0.3 per cent. This is because there were no changes to indirect taxation that impacted on the RPI between May and June. Mortgage interest payments also had only a small effect on the change to the RPI 12-month rate between the two months.
|All items CPI||Annual rate +2.4%, down from +2.8% last month|
|Lowest since November 2009 (+1.9%)|
|Food & non-alcoholic beverages||Annual rate +2.3%, down from +3.3% last month|
|Lowest since June 2010 (+1.9%)|
|Transport||Annual rate +0.9%, down from +1.7% last month|
|Lowest since August 2009 (+0.3%)|
|All goods||Annual rate +1.8%, down from +2.3% last month|
|Lowest since November 2009 (+1.6%)|
|All items RPI||Annual rate +2.8%, down from +3.1% last month|
|Lowest since December 2009 (+2.4%)|
|All items RPI exc MIPS (RPIX)||Annual rate +2.8%, down from +3.1% last month|
|Lowest since November 2009 (+2.7%)|
|All items RPI exc MIPS and indirect taxes||Annual rate +2.9%, down from +3.2% last month|
|Also +2.9% in February 2010|
|Last lower in October 2009 (+2.8%)|
|Seasonal Food||Annual rate -0.4%, down from -0.3% last month|
|Also -0.4% in December 2009|
|Last lower in November 2009 (-1.1%)|
|Personal goods & services||Annual rate +3.1%, down from +3.4% last month|
|Lowest since November 2009 (+2.7%)|
|Motoring expenditure||Annual rate -1.2%, down from 0.0% last month|
|Lowest since July 2009 (-3.5%)|
|All goods||Annual rate +2.3%, down from +3.0% last month|
|Lowest since September 2009 (+1.7%)|
CPI and RPI Reference Tables, June 2012: (1.24 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 1947-2012 or RP02 & Table 4.1 in Focus is now the new Table 20.
Public consultation on the recommended method of reflecting owner occupiers' housing costs in a new additional measure of consumer price inflation; and the strategy for Consumer Price statistics
At its 30 April 2012 meeting, the Consumer Prices Advisory Committee (CPAC) recommended the rental equivalence method for reflecting owner occupiers' housing costs in a new additional measure of consumer price inflation. ONS welcomes views on this recommendation and its strategy for consumer price statistics, with the public consultation closing on 31 August 2012.
Inflation for July 2011 to July 2012 will be published on 14 August 2012. CPI and RPI inflation rates between July 2011 and June 2012 were 2.5 per cent and 3.0 per cent respectively. Inflation rates for July 2011 to July 2012 will take account of price changes between June 2012 and July 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 2012 are 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.
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. Further details can be found in a series of articles in the methodology section of the ONS website.
The official CPI series starts in 1996 but estimates for earlier periods are available back to 1988. These estimates are broadly consistent with data from 1996 but should be treated with some caution. An article about historical estimates (106 Kb Pdf) provides more detail.
RPI data are available back to 1947 but have been re-referenced on several occasions since then, generally accompanied by changes to the coverage and/or structure of the detailed sub-components. Details of these changes are given in Appendices 1 and 2 of the Consumer Price Indices Technical Manual (754.3 Kb Pdf) .
Other measures of inflation – main uses and methodological details
Detailed explanations of 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 Chapters 9 and 10 of the Consumer Price Indices Technical Manual (754.3 Kb Pdf) . In addition this article How ONS consumer price statistics are used (740.6 Kb Pdf) provides further details of 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 formulae 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.
In response to user feedback, we have taken the opportunity to make all CPI and RPI data available in one location. These CPI and RPI Reference Tables (1.24 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 March 2012. These data are updated once a quarter with around a two month lag with the latest CPI publication. For example, the data will next be updated when the August CPI is published on 18 September 2012, at which point the detailed data published will be extended to June 2012.
This bulletin includes the June 2012 data, collected on 19 June 2012. Future publication dates (43.6 Kb Pdf) for this Statistical Bulletin are available (now includes dates to January 2014). The European Commission (Eurostat) released figures for the harmonised index of consumer prices (HICP) for the month of June 2012 for EU Member States, together with an EU average, on 12 July 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 (119.3 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 (1.75 Mb 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) .
Further information on the CPI and RPI, including details of the methodology used to construct the indices, articles, historic data etc. is available from the Consumer Price Index theme page.
Details of the policy governing the release of new data are available from the Media Relations Office. Also available is a list of the names of those given pre-release access (134 Kb Pdf) to the contents of this release.
Bank and Treasury officials were informed at 5pm on the Friday before publication that an open letter was not needed this month between the Governor of the Bank of England and the Chancellor of the Exchequer.
ONS has recently published commentary, analysis and policy on 'Special events' which may affect statistical outputs. For full details go the Special events page on the ONS 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 and
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.
Tel: Luke Croydon + 44 (0) 845 6041858
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CPI/RPI recorded message (available after 9.45am on release day):
Tel: + 44 (0) 1633 456961
Tel: + 44 (0) 1633 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.
|Richard Campbell||+44 (0)1633 451536||Prices, ONSfirstname.lastname@example.org|