The Consumer Price Index (CPI), which includes homeowners’ housing costs (CPIH), rose by 3.1% in the 12 months to July 2024. This follows a 2.8% increase in June but is still below its recent peak of 9.6% in October 2022. The October 2022 inflation rate was the highest in more than 40 years, since the official CPIH series began in January 2006.
On the other hand, the monthly inflation rate for consumer house prices remained relatively flat in July 2024, compared to a 0.3% fall in July 2023. As for owner-occupied housing costs (OOH), they rose by 7.0% in the 12 months to July 2024, up from 6.8% in the 12 months to June. This represents the highest annual rate since March 1992 in the historical series. OOH costs also rose by 0.6% m-o-m, compared to a 0.4% increase between June and July 2023.
Overall, the CPI rose by 2.2% in the 12 months to July 2024, compared to a 2.0% increase in June 2024. Despite this increase, it remains well below its recent peak of 11.1% in October 2022. Based on our indicative estimates of CPI inflation, the October 2022 peak was the highest recorded in over 40 years, starting with the official CPI series in January 1997. The monthly CPI rate in July 2024 was negative 0.2%.
The main factors that determine the annual inflation rate for the household CPI and the consumer price index are the same as they are common to both measures. However, the foreign sales component accounts for nearly 16% of the household CPI and is the main influence on the differences between the household CPI and CPI inflation rates. This makes the household CPI our most comprehensive measure of inflation.
Notable price movements
The rise in the annual CPI inflation rate in July 2024 reflects upward contributions from four sections, offset by downward contributions from five sections. The largest upward impact came from housing and household services. The largest downward impact came from restaurants, hotels and transportation. Monthly housing and household services prices rose 0.1% in July 2024, after falling 1.4% last year. The annual rate increased to 3.7% in the year to July 2024, from 2.3% in the year to June.
The rise in the annual sectional rate was mainly due to gas prices, although electricity prices also contributed to the rise. Shows the revaluation indicators for gas and electricity from March 2021 to July 2024. Although monthly gas and electricity prices fell by 7.8% and 6.8% respectively in July 2024, which were smaller than the equivalent falls in July 2023 (-25.2% and -8.6%), annual prices fell by less in July 2024 (-22.8% and -19.5%) than in June 2024 (-37.5% and -21%). This led to electricity and gas contributing to the annual rates of the CPI and CPI and housing in July 2024.
Although energy prices are lower in July 2024 than they were a year ago and well below their peaks in the first quarter of 2023, gas and electricity prices in July 2024 are still about 68% and 45% higher, respectively, than they were in March 2021.
Restaurants and hotels: Restaurant and hotel prices fell 0.4% between June and July this year, compared with a 0.9% rise a year ago. The annual rate rose 4.9% in the year to July 2024, down from 6.3% in the year to June. The slower annual rate was almost entirely due to hotel prices, which saw a monthly decline of 6.4% compared with a rise of 8.2% a year ago.
Transportation price analysis through July 2024: Changes and impacts
Transport prices rose 0.1% in the year to July 2024, compared with a 0.7% increase in the year to June. On a monthly basis, prices rose 0.7%, down from a 1.3% increase in the same period a year earlier. The annual decline was due to downward impacts in several categories, including maintenance and repair of personal transport equipment, passenger air transport and motor fuel.
In this context, the average price of petrol fell by 1.4p per liter between June and July 2024, to 144.4p per liter compared to 143.2p per liter in July 2023. Diesel prices fell by 1.1p per liter in July 2024, to 150.4p per liter, compared to 145.2p per liter in July 2023. As a result of these changes, overall motor fuel prices rose by 1.8% in the year to July 2024, compared to a 2.6% increase in the year to June. The main adverse impact was from used cars, which rose by 0.1% monthly, compared to a 1.4% decrease in the same period last year.
On an annual basis, used car prices fell 8.4% in the year to July 2024, compared with a 9.8% decline in the year to June 2024. This marked a 12-month negative annual rate. Food and non-alcoholic beverage prices rose 1.5% in the year to July 2024, the same rate as in the year to June. The June figure represents the lowest annual rate since October 2021, when it was 1.3%, and is the first time since March 2023 that the annual rate has not fallen, having seen prices slow for 15 consecutive months before that. The 1.5% annual rate is down from a recent high of 19.2%, the highest annual rate seen in more than 45 years. Prices in this segment were unchanged between June and July 2024.
Annual CPI inflation rates
for all goods and all services, plus the CPI excluding energy, food, alcohol and tobacco (often referred to as the core CPI). The headline CPI inflation rate has been added for comparison. The core CPI rose 3.3% in the year to July 2024, down from 3.5% in June 2024 and below its recent peak of 7.1% in May 2023, which was the highest level since 7.2% in March 1992 in our historical composite series. The CPI for all goods fell 0.6% in the year to July 2024, compared with a decline of 1.4% in the year to June. The CPI for all services rose by 5.2% in the year to July 2024, down from 5.7% in June and down from 7.4% in July 2023, the joint highest rate (with May 2023) since March 1992. As with the annual inflation rates for all items, the causes of CPI and goods and services inflation are the same (except for owner-occupied housing costs (OOH) and council tax, which are excluded.
, which includes owner-occupied housing costs (CPIH), rose by 3.1% in the 12 months to July 2024.){kind=link}