The Consumer Prices Index including owner occupiers' housing costs (CPIH) 12-month inflation rate was 1.1% in July 2020, up from 0.8% in June 2020; the Consumer Prices Index (CPI) was 1.0% in July 2020, up from 0.6% in June 2020.
As there are now relatively few unavailable items, experimental series that update the baskets to remove unavailable items result in an annual growth rate equal to the official rates, at 1.1% and 1.0%, respectively.
This will be the last month of the rescaled basket series as the majority of items are now available again, meaning this comparison is no longer needed.
In May 2020 we explored the impact of the approach taken to calculate the official Consumer Prices Index including owner occupiers' housing costs (CPIH) and the Consumer Prices Index (CPI) series, given the impact of social distancing policies and movement restrictions. We compared it with experimental series looking at what would happen to inflation if we re-weighted the basket for April 2020 so that unavailable items are excluded from these rescaled experimental indices. We also adjusted the weight for fuel as there was evidence to suggest that fuel consumption had fallen considerably in April 2020.
This article updates the rescaled basket analysis using data for July 2020, concentrating only on adjusting for unavailable items, rather than a further adjustment for the fall in fuel consumption. There were 12 unavailable items in the basket for July, down from 67 in June and 74 in May.
Further analysis has now been done to estimate the effects of changing consumer spending patterns during the lockdown period. The analysis builds on the work in this article and expands it to not only remove unavailable items but also to adjust the weights for the remaining items based on available evidence about how spending patterns have changed.Back to table of contents
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