Consumer price inflation, UK: August 2020

Price indices, percentage changes and weights for the different measures of consumer price inflation.

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Contact:
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Release date:
16 September 2020

Next release:
21 October 2020

1. Main points

  • The Consumer Prices Index including owner occupiers' housing costs (CPIH) 12-month inflation rate was 0.5% in August 2020, down from 1.1% in July 2020.

  • The largest contribution to the CPIH 12-month inflation rate in August 2020 came from recreation and culture (0.35 percentage points).

  • Falling prices in restaurants and cafes, arising from the Eat Out to Help Out Scheme, resulted in the largest downward contribution (0.44 percentage points) to the change in the CPIH 12-month inflation rate between July and August 2020.

  • Other smaller downward contributions came from falling air fares and clothing prices rising by less between July and August 2020 than between the same two months a year ago.

  • The largest, partially offsetting, upward contributions came from games, toys and hobbies, accommodation services, road transport services and second-hand cars.

  • As the restrictions caused by the ongoing coronavirus (COVID-19) pandemic have been eased, the number of CPIH items that were unavailable to UK consumers in August has reduced to eight, as detailed in Table 58 of the Consumer price inflation dataset; these account for 1.1% of the CPIH basket by weight and made a small downward contribution of 0.01 percentage points to the change in the CPIH 12-month rate; the number of unavailable items is down from 12 for July and a high of 90 for April; for August, we have collected a weighted total of 86.9% of comparable coverage collected previously (excluding unavailable items).

  • The Consumer Prices Index (CPI) 12-month rate was 0.2% in August 2020, down from 1.0% in July.

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2. CPIH 12-month inflation rate

The Consumer Prices Index including owner occupiers' housing costs (CPIH) 12-month inflation rate was 0.5% in August 2020, down from 1.1% in July 2020.

The CPIH fell by 0.3% between July and August 2020, compared with a rise of 0.3% between the same two months of 2019.

The Consumer Prices Index (CPI) 12-month inflation rate was 0.2% in August 2020, down from 1.0% in July.

The CPI fell by 0.4% between July and August 2020, compared with a rise of 0.4% between the same two months of 2019.

Given that the owner occupiers' housing costs (OOH) component accounts for around 16% of the CPIH, it is the main driver for differences between the CPIH and CPI inflation rates.

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3. Contributions to the CPIH 12-month inflation rate

Figure 2 shows the extent to which the different categories of goods and services have contributed to the overall Consumer Prices Index including owner occupiers' housing costs (CPIH) 12-month inflation rate over the last two years.

The contributions from most broad groups eased in August 2020 and three had a downward pull on inflation, most notably restaurants and hotels.

The restaurants and hotels group made a downward contribution of 0.27 percentage points in the latest month reflecting a negative 12-month inflation rate of 2.8%. This is the first time that the 12-month rate has been negative since the series began in 1989. The data reflect the effect of the Eat Out to Help Out Scheme. Under this, consumers could get a 50% discount (up to a maximum of £10 per diner) on food and non-alcoholic drinks to eat or drink in every Monday, Tuesday and Wednesday in August at participating establishments. The reduction in Value Added Tax (VAT) from 20% to 5% on the hospitality sector also contributed to the fall in prices.

Over the last two years, the contribution from transport has shown more variation than any other group, ranging from an upward contribution of 0.75 percentage points in August 2018 to a downward contribution of 0.20 percentage points in May 2020. Much of the movement comes from changes in the price of motor fuels, especially during the coronavirus (COVID-19) pandemic, though contributions from air fares and second-hand cars have also changed noticeably over the period.

The downward contribution from transport in August 2020 was caused by downward contributions of 0.28 percentage points and 0.14 percentage points from motor fuels and air fares respectively, partially offset by an upward contribution from the purchase of vehicles. Average petrol prices stood at 113.1 pence per litre in August 2020, up from 111.4 pence in July but below 128.3 pence recorded in August 2019. Average diesel prices were 118.1 pence per litre in August, compared with 132.6 pence a year ago.

Over the last 10 years, the largest contribution to the annual CPIH inflation rate came from either housing and household services or transport. However, this changed in April 2020 because of a combination of reduced household utility bills and falling motor fuel prices. Since then, the largest contribution has come from recreation and culture. The contribution from this group increased between March and April 2020, when prices for data processing equipment, computer games, games consoles and children's toys rose – unlike the March to April falls observed in recent years – partly as a result of the restrictions caused by the coronavirus. The contribution from recreation and culture has fluctuated since then partly dependent on price movements for computer games and consoles both in 2020 and the equivalent months in 2019. In August 2020, the contribution rose to 0.35 percentage points, an increase of 0.02 percentage points from July.

Between November 2018 and March 2020, the largest upward contribution to the CPIH inflation rate came from housing and household services. However, this group's contribution fell from 0.51 percentage points in March 2020 to 0.16 percentage points in April, predominantly because of the introduction of the latest Office of Gas and Electricity Markets (Ofgem) energy price cap. Since April, the contribution from housing and household services has risen gradually to 0.20 percentage points in August.

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4. Contributions to change in the CPIH 12-month inflation rate

Figure 3 shows how each of the main groups of goods and services contributed to the change in the Consumer Prices Index including owner occupiers' housing costs (CPIH) 12-month inflation rate between July and August 2020. The corresponding figures for the Consumer Prices Index (CPI) can be found in column F of Table 26 in the Consumer price inflation dataset.

By far, the largest downward contribution (of 0.44 percentage points) to the change in the CPIH 12-month inflation rate between July and August 2020 came from restaurants and hotels. Within this group, the effect came from catering services, where prices fell by 5.7% between July and August 2020, compared with a rise of 0.2% between the same two months in 2019. The fall this year reflects the effect of the Eat Out to Help Out (EOtHO) Scheme and, to a lesser extent, the reduction in Value Added Tax from 20% to 5% on the hospitality sector. The EOtHO Scheme affected the prices of food and non-alcoholic drinks eaten or drunk in participating restaurants, pubs and cafes on Mondays to Wednesdays during August. It did not apply to alcoholic drinks and not all businesses participated in the Scheme. We have used the average price across the week to produce the index, weighting together the full menu price with the discounted price for participating establishments in the sample. The effect of the scheme on the inflation figures will be analysed in a future article.

There was also a large downward contribution (of 0.07 percentage points) from clothing and footwear, where prices overall rose by 0.5% between July and August this year, compared with a larger rise of 1.8% between the same two months a year ago. Price movements this year have not followed the normal seasonal pattern. In recent years, there have been large price falls between May and July because of the summer sales season before prices start to rise again in August as the autumn product ranges start to enter the shops. During 2020, there has been an increased amount of discounting since the beginning of lockdown, leading to a relatively small fall in prices in the summer sales and followed by a relatively small rise in August. Overall, prices have been relatively flat since the beginning of this year.

Within clothing and footwear, the majority of the downward contribution came from women's clothing, where prices rose by 0.7% between July and August 2020, compared with a 3.5% rise between the same two months in 2019. The effect came from a wide range of items including jumpers, cardigans, jackets, tops and formal trousers. There was also a small downward contribution from knitting wool, which saw unusually large price rises just after the start of lockdown in April but whose prices have returned to more normal levels in August.

A smaller downward contribution of 0.03 percentage points came from miscellaneous goods and services, where prices rose this year by less than a year ago. The downward effect came principally from jewellery, clocks and watches, particularly diamond solitaire rings.

Food and non-alcoholic beverages also produced a downward contribution of 0.03 percentage points as prices rose by 0.1% between July and August this year, compared with a larger rise of 0.5% a year ago. The largest effect came from bread and cereals, where prices fell this year but rose a year ago, particularly for items such as chocolate biscuits, packs of individual cakes and dried potted snacks.

There was a small downward contribution (again of 0.03 percentage points) from transport but this masked larger offsetting contributions within the group. Unusually, air fares fell between July and August this year, whereas normally they rise between these months, for example, by 22.4% in 2019. This led to a downward contribution of 0.13 percentage points. Largely offsetting this are upward contributions of 0.04 percentage points from each of coach fares and second-hand cars.

The largest upward contribution (of 0.02 percentage points) to the change in the CPIH 12-month inflation rate between July and August at broad group level came from recreation and culture. Prices, overall, fell by 0.4% between the two months, compared with a larger fall of 0.6% between the same two months a year ago.

Within this broad group, the main upward contribution came from games, toys and hobbies, particularly computer game downloads. Over the year-to-date, price movements for games, toys and hobbies have been less volatile than during the same period last year. It is possible that prices have been influenced by the coronavirus (COVID-19) lockdown changing the timing of demand and the availability of some items, particularly consoles. However, it is equally likely to be a result of the computer games in the bestseller charts. Price movements for computer games can often be relatively large depending on the composition of these charts. Within recreation and culture, the upward contribution from games, toys and hobbies was partially offset by a downward contribution from package holidays, where prices fell this year but rose a year ago.

Overall, there were eight unavailable items in the CPIH, plus one item where prices were available in theory but had to be imputed because few price quotes could be collected. In total, these made a small downward contribution of 0.01 percentage points to the change in the CPIH 12-month inflation rate. None of the imputed items individually made a significant contribution to the change in the rate.

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5. Owner occupiers' housing costs

Figure 4 shows the contribution of owner occupiers' housing costs (OOH) and Council Tax to the Consumer Prices Index including owner occupiers' housing costs (CPIH) 12-month inflation rate in the context of wider housing-related costs.

In April 2020, the contribution of housing components to the CPIH 12-month inflation rate fell to its lowest level since November 2010. The fall in contribution in April 2020 was the result of reduced contributions from electricity, gas, liquid fuels, water supply and sewerage collection. In August 2020, the downward contribution to the CPIH 12-month rate from these five items was little changed from April, at 0.23 percentage points. However, the contribution of housing components in total to the CPIH 12-month inflation rate rose by 0.03 percentage points between April and August, principally as a result of rises to average charges for registered social landlord (RSL) rents in July.

Looking across a longer timeframe, the contribution from OOH had been on a downward trend from a high in October 2016. However, it has stabilised since early 2018 and made the largest contribution to the CPIH 12-month inflation rate from all the housing and household services categories throughout most of 2019 and into 2020. The measurement of OOH uses the rent paid for an equivalent house as a proxy for the costs faced by an owner occupier. It includes the rents paid for all lets, not just new lets, so that changes in rents take longer to feed through than in the case of measures based on new lets only.

Electricity, gas and other fuels made a negative contribution during 2015 and 2016, but subsequent rises, most notably in electricity prices, saw the contribution turn positive through 2017 and into 2018. Further electricity and gas price rises in summer and autumn 2018 increased their contribution to the CPIH 12-month rate.

The introduction of the Office of Gas and Electricity Markets' (Ofgem's) initial energy price cap resulted in reduced contributions to the CPIH 12-month inflation rate for January to March 2019. However, the contribution increased in April 2019 as energy providers responded to Ofgem's subsequent raising of the price cap. There was a negative contribution from electricity, gas and other fuels between October and December 2019, before the price reductions in January 2019 unwound leading to an upward contribution from January 2020.

The latest price cap, introduced on 1 April 2020, saw prices of electricity rise slightly (by 0.2% on the month) and gas prices fall by 3.5%, compared with larger electricity and gas price rises of 10.9% and 9.3% respectively in April 2019.

The increases in Council Tax that started in 2016 caused its contribution to rise over the following few years, but there was little change when the 2019 increases were introduced in April last year and a slight easing in the contribution in April this year.

The reduction in the contribution from rents between 2016 and 2018 is likely to be a result of a policy to reduce social housing rent. The contribution from rent in total though, has subsequently risen since early 2018.

Other housing costs (namely, regular maintenance and repair, along with water and sewerage services) tend to make small contributions to the 12-month inflation rate. The contribution from water and sewerage services turned negative in April this year when bills were reduced as a result of the Water Services Regulation Authority (Ofwat) encouraging suppliers to reduce household bills.

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6. Consumer price inflation data

Consumer price inflation tables
Dataset |Released 16 September 2020
Measures of monthly UK inflation data including the Consumer Prices Index including owner occupiers' housing costs (CPIH), Consumer Prices Index (CPI) and Retail Prices Index (RPI). These tables complement the consumer price inflation time series dataset.

Consumer price inflation time series
Dataset | Dataset ID: MM23 | Released 16 September 2020
Comprehensive database of time series covering measures of inflation data for the UK including CPIH, CPI and RPI.

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7. Glossary

Consumer price inflation

Consumer price inflation is the rate at which the prices of goods and services bought by households rise or fall. It is estimated by using price indices. Consumer price indices, a brief guide gives an overview of the indices and their uses.

12-month inflation rate

The most common approach to measuring inflation is the 12-month inflation rate, which compares prices for the latest month with the same month a year ago. In any given month, the 12-month rate is determined by the balance between upward and downward price movements of the range of goods and services included in the index.

Consumer Prices Index including owner occupiers' housing costs (CPIH)

The CPIH is the most comprehensive measure of inflation. It extends the Consumer Prices Index (CPI) to include a measure of the costs associated with owning, maintaining and living in one's own home, known as owner occupiers' housing costs (OOH), along with Council Tax. Both of these are significant expenses for many households and are not included in the CPI.

Consumer Prices Index (CPI)

The CPI is a measure of consumer price inflation produced to international standards and in line with European regulations. First published in 1997 as the Harmonised Index of Consumer Prices (HICP), the CPI is the inflation measure used in the government's target for inflation.

The CPI is produced at the same level of detail as the CPIH in the accompanying dataset and time series.

Retail Prices Index (RPI)

The RPI does not meet the required standard for designation as a National Statistic. In recognition that it continues to be widely used in contracts, we continue to publish the RPI, its subcomponents and RPI excluding mortgage interest payments (RPIX). To view the all-items RPI and 12-month inflation rate, please see the time series section of the inflation and price indices area of our website.

The UK Statistics Authority recommended in 2019 that the publication of the RPI should be stopped at a point in the future and that in the interim, the shortcomings of the RPI should be addressed by introducing CPIH data sources and methods into its production. The Authority and HM Treasury subsequently launched a consultation on 11 March 2020 on the Authority's proposal to address the shortcomings of the RPI. HM Treasury consulted on the appropriate timing for the proposed changes to the RPI to take place. The Authority consulted on how to make its proposed methodological changes to the RPI in a way that follows best statistical practice. The consultation closed on 21 August and a response will be provided during autumn 2020.

Alongside the consultation on the future of the RPI, we published proposed updates to our article on the three "use cases" for our consumer inflation measures in Measuring changing prices and costs for consumers and households, proposed updates: March 2020.

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8. Measuring the data

Coronavirus

In response to the coronavirus (COVID-19) pandemic, we are working to ensure that we continue to publish our consumer price statistics. In line with the current government guidelines, we are providing Office for National Statistics (ONS) staff with the opportunity to work from home and to avoid unnecessary travel and social contact. We have an established infrastructure, and these changes will not impact on our ability to produce our Consumer Prices Index including owner occupiers' housing costs (CPIH), Consumer Prices Index (CPI) and Retail Prices Index (RPI) statistics.

In April to July, there were challenges around some of our collection activities, as approximately 80% of the price quotes (45% by weight) for the CPIH basket are usually physically collected in stores across 141 locations in the UK. However, in August, our price collectors were able to resume full in-store collections in 102 of the locations and partial collection in a further 26 following the approach detailed in our Consumer price statistics: resuming a field-based price collection article. For the remaining locations, prices continued to be collected over the internet and by phone and email. We will continue to monitor the situation regarding local lockdowns and revert where necessary to the online collection of prices. The approach for resuming in-store collections was consistent with Eurostat advice, published in their Guidance note on HICP issues emerging from the lifting of lockdown measures (PDF, 388KB).

For the August price collection, we brought four previously unavailable items in the leisure sector back into the CPIH basket of goods and services, as government guidance on some services relaxed. The number of items normally in the basket that were unavailable to consumers in August fell to eight, accounting for 1.1% of the CPIH basket by weight. This is a substantial reduction from the 67, 74 and 90 unavailable items for June, May and April respectively. The list of unavailable items in August, and the changes to the list from previous months, are shown in Table 58 in the Consumer price inflation dataset.

The Coronavirus and the effects on UK prices article describes the approach we have taken for imputing price movements for items that are currently unavailable to consumers to purchase. For unavailable items in the RPI, we have imputed price movements based on the all-available-items price movement of the RPI (annual or monthly, depending on whether the series is seasonal or not), and for the CPIH and CPI we have imputed price movements based on the all-available-items price movement of the CPI. It is necessary to use the CPI price movement for both, so that both CPIH and CPI are constructed from the same set of item indices.

It should be noted that, following the publication of the Coronavirus and the effects on UK prices article, we changed the imputation methodology applied to four items from a non-seasonal to a seasonal method. We are sorry for any inconvenience caused by these changes not being reflected in Annex B of the article. The affected items are (in item number order):

  • NHS dental charges (520327)

  • Admission to historic monuments (640211)

  • Football admissions (640221)

  • Part-time leisure classes (640228)

Overall, the number of price quotes that are usually collected in store and that are used in constructing the August 2020 indices was 89.0% of the number of price quotes collected in February 2020 (excluding unavailable items). It is not unusual for the proportion of quotes to be below 100% as there are often prices that are either temporarily missing or where the price for a non-comparable replacement item is collected. For this reason, we have compared the coverage in August to the February index collected before the social distancing policies and movement restrictions came into effect.

The price quotes collected by ONS staff or from administrative data account for approximately 20% of the price quotes in our CPIH sample. Once all price quotes have been weighted together, the overall coverage for goods and services available in August 2020 was 86.9% of the comparable coverage collected previously (excluding unavailable items). Unlike the in-store collection, where coverage is based on the number of quotes compared with the February collection, the coverage of holiday items (whose prices are collected centrally by ONS staff) uses the number of price quotes collected in the latest month compared with the number collected in the same month last year. This was more appropriate for the coverage of holidays as the number of quotes collected in the summer months will always be greater than in February.

For August 2020, in addition to the eight unavailable items in the CPIH basket, we identified one other item where, although available in theory, price collection had proved largely impossible, so we imputed the price movement. The categories, where the number of price quotes used in constructing the indices is less than half the number used in February, have been identified in relevant tables in the accompanying dataset, for example, in Table 3.

We continue to engage with other national statistical institutes (NSIs) and international organisations to understand how they are responding to similar issues. Under Section 21 of the Statistics and Registration Services Act 2007, the Bank of England must make a determination on any changes to the coverage or basic calculation of the RPI that we propose, to establish whether such a change "constitutes a fundamental change in the index which would be materially detrimental to the interests of the holders of relevant index-linked gilts". We shared our plan with the Bank of England, and they determined that none of the temporary changes outlined "were both fundamental changes to the coverage or basic calculation of the RPI, and also materially detrimental to the holders of relevant index-linked gilts". The correspondence is available.

Coronavirus supplementary analysis

The Consumer prices alternative basket analysis, which explored different methods of dealing with unavailable goods and services in consumer price inflation measurement, has been discontinued. There are now relatively few unavailable items so that experimental series that update the baskets to remove unavailable items would result in an annual growth rate equal to the official rates.

Eat Out to Help Out and reduction in VAT announcement

Following the Chancellor's announcement of the Eat Out to Help Out Scheme to encourage people to return to eating out, we have reflected this discount within the consumer price inflation measures for August 2020. We collect the price for a range of restaurant items, for example, a pub hot meal, restaurant main course and restaurant sweet course so, once confirming that the sampled restaurant or pub is participating in the scheme, we have applied the discount to individual items.

In Section 9.2, Subsidies and discounts, of the Consumer Price Indices Technical Manual, 2019, we state that "discounted and subsidised prices are only recorded if available to anyone with no conditions of sale, otherwise the non-discounted or unsubsidised price is recorded". We want to ensure that the prices used in calculating consumer price indices are those actually paid by households. In this instance, the discount has been applied to all eligible items (meals and non-alcoholic beverages) available for consumption on the premises (that is, not takeaway food).

Having discussed the application of the discount at our Technical Advisory Panel for Consumer Price Statistics (APCP-T), we have applied a reduced rate of discount to individual eligible items to reflect the fact the price is only discounted between Monday and Wednesday. In essence, we have collected the full menu price, adjusted that to calculate the price paid on Monday to Wednesday and then weighted together the reduced and full prices to reflect the average over the week. In some cases, the menu price already reflected the discount. For these, we have calculated the full price and again averaged over the week. We have used daily card transactions data from Revolut to inform the adjustment to average prices. The methodology that we have used is detailed in the Consumer price statistics: resuming a field-based price collection article, albeit the article considered weighting together discounted and full prices based on the number of days in the week whereas card transactions data have now been used.

Having further reviewed the basket of goods and services during the collection, we have calculated that approximately 2.9% of the CPIH basket (which rises to 3.6% for the CPI) could have the discount applied subject to establishments taking part in the scheme.

We have also reflected any change in price resulting from the temporary Value Added Tax (VAT) reduction for food, non-alcoholic drinks, accommodation and attractions in the consumer price inflation measures. Further details on the application of the temporary reduction in VAT in the August price collection can also be found in the Consumer price statistics: resuming a field-based price collection article.

A full analysis of the effect of these measures on the consumer price indices has not been possible in the time available. However, we intend to publish such an analysis in due course.

Reinstatement of the UK House Price Index

The UK House Price Index (HPI) was reinstated on 19 August, starting with the publication of the April 2020 estimate. In order to catch up, the UK HPI is being published every fortnight until the regular publication of the August 2020 index in October. For the August 2020 estimate of RPI, we have calculated the housing element using the June 2020 arithmetic mean estimate. Normally, the July house price would be used in the August RPI (as the HPI usually lags the RPI by a single month) but during the lockdown period, we have used the latest available estimate, which for August is the June house price.

We will ensure that the production of the HPI will have caught up in time for September's RPI estimate (published on 21 October 2020) to be based on the August 2020 HPI.

Further details on the reinstatement of the UK HPI are outlined in the UK House Price Index to return article.

Changes to the detailed briefing note

The consumer price inflation detailed briefing note is a background briefing published alongside this statistical bulletin. The note contains details of the items contributing to the changes in the CPIH (and RPI), details of any notable movements, a summary of the reconciliation of CPIH and RPI, and the outlook, which looks ahead to next month's release.

This month, the format of the briefing note has changed to a Microsoft Excel spreadsheet, in place of the previous pdf. This change is required to support the ONS's commitment to improving the accessibility of our data. We would welcome any feedback you may have on the new format. Please email any comments to cpi@ons.gov.uk.

After EU withdrawal

As the UK leaves the EU, it is important that our statistics continue to be of high quality and are internationally comparable. During the transition period, those UK statistics that align with EU practice and rules will continue to do so in the same way as before 31 January 2020.

After the transition period, we will continue to produce our consumer price statistics in line with the UK Statistics Authority's Code of Practice for Statistics and in accordance with internationally agreed statistical guidance and standards.

These currently include the standard international Classification of Individual Consumption According to Purpose (COICOP) system, developed by the UN Statistical Division, and for the CPI, the rules underlying the construction of the Harmonised Index of Consumer Prices (HICP), developed by Eurostat in conjunction with EU member states and European Economic Area countries.

Pre-release access

The Bank of England was granted exceptional pre-release access to an estimate of consumer price inflation data at 1:00pm on Friday 11 September 2020 so that the data were available for the Monetary Policy Committee meeting held on that day. The letters requesting and agreeing to pre-release are available at Exchange of letters between the ONS, Bank of England and HM Revenue and Customs for exceptional pre-release access, June 2020.

Methodology information

The consumer price indices are normally based on prices collected from outlets around the country, supplemented by information collected centrally over the internet and by phone. From April to July 2020, as a result of the coronavirus pandemic, we collected all prices centrally by phone, email and from websites, and used imputation to produce series for some goods and services, as outlined in Coronavirus and the effects on UK prices. For the August index, price collectors were able to resume full in-store collections in 102 of the locations and partial collection in a further 26 out of the 141 locations used across the country. For the remaining locations, which were affected by local lockdowns and collection issues, prices continued to be collected centrally. Consumer price statistics: resuming a field-based price collection describes the principles used in resuming price collection across the country and discusses specific issues arising from the resumption.

The figures in this publication use data collected on or around 11 August 2020.

Consumer price indices, a brief guide gives an overview of consumer price statistics.

The Consumer Price Indices Technical Manual covers the concepts and methodologies underpinning the indices in more detail. The latest version was released on 18 September 2019.

The CPIH Compendium provides a comprehensive source of information on the CPIH, with a focus on the approach to measuring owner occupiers' housing costs (OOH).

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Consumer price inflation QMI.

Consumer price inflation, updating weights: 2020 was released on 19 March 2020 and describes the latest update of the relative weights of items in the consumer price inflation basket to ensure they remain representative of current consumer spending patterns. A new source of information for some of the underlying low-level weights was also introduced with the February index. Impact of introducing a new data source for shop-type weights on consumer price indices, released on 12 February 2020, describes the change of source that has been made.

Consumer price inflation basket of goods and services: 2020, released on 16 March 2020, outlines the review process for the items making up the inflation basket used to calculate the UK consumer price inflation indices and the changes in the latest year.

Explaining the contribution to change in the 12-month rate (PDF, 37KB) explains how the various types of goods and services contribute to the change in the 12-month inflation rate between the latest two months. The size and direction of these contributions depend on how prices changed between both the latest two months this year and the same two months last year. For example, the price of a product could make an upward contribution to the change in the rate even if it fell, provided that it fell by less than it did between the same two months a year ago.

Users and uses of consumer price inflation statistics provides information about the users and uses of consumer price inflation statistics and user experiences of these statistics. It also provides information on the characteristics of the different measures of consumer price inflation in relation to potential use.

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9. Strengths and limitations

We have illustrated our future approach to measuring changing prices and costs faced by consumers and households using three "use cases", along with how they relate to the measures that we currently publish and those that are under development. We have also published proposed updates to the article in Measuring changing prices and costs for consumers and households, proposed updates: March 2020. Specifically, the three cases refer to the Consumer Prices Index including owner occupiers' housing costs (CPIH) as our lead measure of inflation based on economic principles, the Household Costs Indices as a set of measures to reflect the change in costs as experienced by households, and the Retail Prices Index (RPI) as a legacy measure that is required to meet existing user needs. Shortcomings of the Retail Prices Index as a measure of inflation, released on 8 March 2018, describes the issues with the RPI.

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Contact details for this Statistical bulletin

Philip Gooding
cpi@ons.gov.uk
Telephone: Consumer price inflation enquiries: +44 (0)1633 456900. Consumer price inflation recorded message (available after 8:00am on release day): +44 (0)800 0113703