Volatile petrol helps fall in consumer prices inflation
New figures from the Office for National Statistics (ONS) show that Consumer Prices Index (CPI) inflation the Government’s target measure fell to 2.3 per cent in October, the first fall for over a year.
Reversing the trend of recent months, the largest downward contribution to the fall in annual rate came from fuels and lubricants as petrol pump prices fell back from record highs in September. Average recorded prices of ultra low sulphur petrol fell by 1.3p per litre in October compared with an increase of 1.8p a year ago. Within transport there were offsetting upward effects from second hand car prices and air fares which both fell by less than last year.
Another large downward contribution came from miscellaneous goods and services, largely from financial services with charges relating to bank
overdrafts increasing by less than a year ago. Plentiful supplies of some fresh vegetables caused prices to fall this year, generating another large downward contribution from food and non alcoholic beverages.
Housing and household services provided only a small upward contribution, with the increases in gas and electricity charges being largely offset by rental costs which rose by less than last year.
Small upward contributions came from recreation and culture and from tobacco where prices for a packet of 20 cigarettes rose by around 3p on average.
Retail Price Index (RPI) inflation also fell in October, where there were additional downward influences from housing components excluded from the CPI, especially depreciation costs the amount home owners need to spend to maintain their property as house prices used in their calculation rose by less than last year.
RPIX inflation the all items RPI excluding mortgage interest payments fell to 2.4 per cent in October, from 2.5 per cent in September.
As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate is around the average for the European Union as a whole. The provisional inflation rate for the enlarged EU 25 in September was 2.5 per cent, the same as the UK figure last month.
