Core Indices Up: The consumer price index, which includes housing costs, rose 3.1% in the 12 months through August 2024. This figure was unchanged from July.
Monthly Changes: On a monthly basis, the consumer price index for homes rose 0.4% in August 2024, the same rate as in August 2023. The consumer price index also rose 0.3% in August, similar to August 2023.
Major Contributors to Prices: Airfares are a major contributor to the monthly increase in consumer prices. Airfares have risen this year, after falling the year before. In contrast, prices for motor fuels have fallen, as have restaurant and hotel services.
Core Price Index: The core consumer price index, which excludes energy and food, rose 4.3% in the 12 months through August 2024, compared to 4.1% in July. Average commodity prices also fell from -0.5% to -0.9%, while services prices rose from 5.7% to 5.9%.
Impact of motor fuel
Price decline: Offsetting the rise in air fares, the transport sector saw a downward impact from motor fuel. The average price of petrol fell by 2.1p per litre between July and August 2024, to 142.3p per litre, compared with 148.5p per litre in August 2023. Diesel prices also fell by 2.6p per litre, to 147.8p per litre.
Trend: These moves resulted in motor fuel prices falling by 3.4% in the year to August 2024, while there was a 1.8% increase in the year to July.
Restaurants and Hotels Inflation Rate: The annual inflation rate for restaurants and hotels was 4.4% in August 2024, down from 4.9% in July, the lowest rate since July 2021.
Monthly Changes: On a monthly basis, prices fell 0.7% in August 2024, compared with a smaller 0.1% decline in the same month last year.
Consumer Price Index Up
The consumer price index, which includes housing costs, rose 3.1% in the 12 months through August 2024. This figure has been steady since July, and shows a significant decline from its peak of 9.6% in October 2022.
Inflation History: Current inflation estimates reflect the highest in more than 40 years, with the October 2022 rate hitting a historic high. The official statistical series began in January 2006.
Monthly inflation: The monthly consumer price inflation rate in August 2024 was 0.4%, the same as in August 2023.
Housing costs: Owner-occupied housing costs rose 7.1% in the 12 months to August 2024, up from 7.0% in July. This is the highest annual rate since March 1992. Housing costs also rose 0.6% in the month.
General consumer price index: The consumer price index rose 2.2% in the 12 months to August 2024, unchanged from July. This is well below its recent peak of 11.1% in October 2022.
Factors affecting inflation: The main factors affecting inflation in the household consumer price indices are similar. The foreign sales component accounts for about 16% of the household consumer price index, which explains the differences in the inflation rates in the two indices.
The data may show relative stability in consumer price indices, with continued pressures on housing costs. Trends suggest a marked improvement in rates compared to previous peaks.
Notable price movements
Standard inflation rates: Annual inflation rates in August 2024 were notably stable, with contributions from a variety of product groups.
Upward contributions: The transport sector recorded the highest upward contribution to inflation, indicating price increases in this sector.
Downward contributions: These increases were offset by downward contributions from seven sectors, most notably restaurants and hotels, as well as alcohol and tobacco.
Price movements in the transport sector
These price movements illustrate different market dynamics, with increases in transportation driving inflation, while other sectors reflect flat or falling prices.
Price movements in the transportation sector Overall price increases: Prices in the transportation sector rose 1.2% in the year to August 2024, compared with a 0.1% increase to July. This is the largest annual increase since May 2023, when the rate was 1.3%.
Monthly changes: On a month-on-month basis, prices rose 1.3% in August 2024, compared with a 0.2% increase in the same month last year.
Influencing factors: Increases in air fares contributed to the increase, as did a smaller impact from used cars. These increases were partly offset by downward effects from motor fuel prices
Consumer price inflation from the Office for National Statistics: Airfare prices up: Significant increase: Airfare prices rose by 22.2% between July and August 2024. This is the second largest increase since monthly price records began in 2001, and the increase came mainly from European flights.
Last year’s decline: Airfare prices fell by 2.1% between July and August 2023 last year. This was only the second time prices have fallen between these two months, as they were also affected in 2020 by the coronavirus pandemic. The decline was partly due to relatively high prices in July 2023, which may have been linked to the departure date of the flights.
Used car prices Monthly changes: Used car prices rose by 0.1% between July and August 2024, following a monthly decline of 1.8% last year. On an annual basis, prices fell by 6.6% to August, compared to a decline of 8.4% to July.
Continued negative trends: Prices have been negative on an annual basis for 13 consecutive months, although the decline has been less severe since May.
