Retail Economics Response - ONS Consumer Price Index October 2018

14 November 2018

The Consumer Price Index (CPI) rose 2.4% on the previous year in October, unchanged from the previous month. This was below the consensus view, with expectations of inflation rising to 2.5%.

The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation also remained unchanged in October, rising 2.2%, year-on-year.

The Retail Price Index (RPI) rose 3.3%, year-on-year, unchanged from the previous month. RPI (excluding mortgage payments) slowed to 3.2%, from the 3.3% rise in September 2018.

The largest downward contribution came from Food and Non-Alcoholic Beverages where prices fell between September and October this year, compared with a rise between the same two months a year earlier. Yoghurts and cheese were noted as two of the main contributors. Elsewhere, the Clothing and Footwear and Transport categories also provided some downward pressure.

Upward pressure was provided by Housing and household services as prices of domestic gas rose this year by more than they did a year earlier.

Core inflation (which excludes food and energy prices) rose 1.9% on the previous year, unchanged from the previous month.

Figure 1: CPIH, OOH (owner occupiers’ housing costs) and CPI 12-month inflation rate for the last 10 years: October 2008 to October 2018

Souce: ONS