The Consumer Price Index (CPI), which includes homeowners’ housing costs (CPIH), rose by 3.5% in the 12 months to November 2024, compared with 3.2% in October. This is below the peak of 9.6% inflation recorded in October 2022 (Figure 1).
On a monthly basis, the CPI for homes rose by 0.2% in November 2024, compared with a 0.1% fall in the same month last year. This rise occurred despite complex global economic conditions.
As for owner-occupied housing costs (OOH) in the CPI for housing, they rose by 7.8% in the 12 months to November 2024, compared with 7.4% in the same period to October. This is the highest annual rate since February 1992 in the historical series. OOH costs also rose by 0.8% in the month, compared to a 0.4% increase in the same month last year.
On the other hand, inflation remains a challenge for the British economy, especially with the continued increase in housing costs that greatly affect homeowners. The rise in the cost of living increasingly affects low-income families.
The monetary policies the British government pursues aim to control inflation levels by raising interest rates, but these policies still have a limited impact in some sectors, such as housing and energy. With prices continuing to rise, the future of inflation in the United Kingdom remains unclear. While inflation rates are expected to stay within high limits in the coming months, some indicators suggest that inflation may begin to decline gradually.
It is important to intensify efforts to increase the use of economic tools necessary to reduce the impact of inflation on citizens. It should also be considered to improve levels of investment in infrastructure to support sustainable economic growth.
Annual inflation rate in the household consumer price index and the consumer price index
The Consumer Price Index (CPI) rose 2.6% in the 12 months to November 2024, compared to 2.3% in October. Despite this increase, it is still well below its peak of 11.1% in October 2022. The CPI also saw a slight increase of 0.1% in November 2024, compared to a decline of 0.2% in the same month last year.
The main factors that influence the annual inflation rate in the CPI and the CPI are the same, as the factors affecting both measures are similar. However, it is worth noting that the foreign sales component accounts for about 16% of the CPI. This factor is the main driver of the differences between the inflation rates in the two indices. It is worth noting that this difference makes the CPI a more comprehensive measure of inflation.
It is important to note that this measure includes many factors that affect the broader economy, such as changes in the costs of energy and imported goods. Despite fluctuations in some sectors, the overall trend shows a slight improvement in the household CPI compared to the same period last year. This indicator mainly helps determine the economic policies the government adopts.
On the other hand, the prices of basic commodities such as food and energy have shown notable movements. The rise in energy prices is one of the main factors affecting the general level of prices. This increase reflects the increasing pressure on British households, as energy costs constitute a large part of monthly expenses.
In Section 4 of this report, we will discuss in detail the movements in inflation in the household CPI. In addition, we will provide commentary on other indicators related to inflation. We will also review price developments in the industrial.
Notable movements in prices
The transportation sector saw prices fall by 1.1% in the year to November 2024, compared with a 2.0% decline in the year to October (Figure 3). On a monthly basis, prices fell by 0.8% in November 2024, compared with a 1.7% decline in the same month last year. This change was the result of mixed effects on the prices of some goods and services.
The largest impact on this change was due to higher prices for motor fuel and used cars. This increase was partially offset by the impact of lower airfares. In this context, the average price of petrol rose by 0.8p per litre between October and November 2024, to 134.8p per litre, down from 151.0p per litre in November 2023. In contrast, diesel prices rose by 1.4p per litre in November 2024, to 140.5p per litre, down from 159.0p per litre in November 2023.
These changes contributed to a 10.9% fall in motor fuel prices in the year to November 2024, compared to a larger 13.7% fall in the year to October. Despite these declines, used car prices also saw notable changes. Used car prices fell by 0.2% between October and November 2024, compared to a larger 2.1% fall in the same period last year. On an annual basis, prices fell by 1.3% in the year to November 2024, compared with a larger 3.2% fall in the year to October. However, prices have decreased on an annual basis for 16 consecutive months.
These price movements show a mixed effect on citizens, with changes in fuel and used car prices having a significant impact on the cost of living. At the same time, some indicators suggest that prices may begin to gradually stabilize in the coming months, which could provide some relief to UK consumers.
, rose by 3.5% in the 12 months to November 2024.){kind=link}