UK inflation hits 40-year high

The UK’s Office for National Statistics (ONS) said the 9% rise in the consumer price index is the highest since records began in 1989, surpassing the 8.4% annual rise in March 1992. The office estimates that inflation would have been higher sometime around 1982.

• The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 7.8% in the 12 months to April 2022, up from 6.2% in March.
• The largest upward contributions to the annual CPIH inflation rate in April 2022 came from housing and household services (2.76 percentage points, principally from electricity, gas and other fuels, and owner occupiers’ housing costs) and transport (1.47 percentage points, principally from motor fuels and second-hand cars).
• On a monthly basis, CPIH rose by 2.1% in April 2022, compared with a rise of 0.7% in April 2021.
• The largest upward contributions to the change in the CPIH 12-month inflation rate between March and April 2022 came from housing and household services (1.27 percentage points), restaurants and hotels (0.11 percentage points), and recreation and culture (0.10 percentage points), with the largest partially offsetting downward contribution from clothing and footwear (0.09 percentage points)
• The Consumer Prices Index (CPI) rose by 9.0% in the 12 months to April 2022, up from 7.0% in March.
• On a monthly basis, CPI rose by 2.5% in April 2022, compared with a rise of 0.6% in April 2021.

The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 7.8% in the 12 months to April 2022, up from 6.2% in March. This is the highest recorded 12-month inflation rate in the National Statistics series, which began in January 2006. The rate was last higher in the constructed historic estimates in April 1991, when it stood at 8.0%. Moreover, the rise of 1.6 percentage points to 7.8% in April 2022 is the largest increase in the annual rate in the National Statistics series. It is also the largest increase in the earlier constructed series, which goes back to January 1989.

The Consumer Prices Index (CPI) rose by 9.0% in the 12 months to April 2022, up from 7.0% in March. This is the highest CPI 12-month inflation rate in the National Statistics series, which began in January 1997. It is also the highest recorded rate in the constructed historical series, which began in January 1989. This is also the largest increase in the annual rate in either the National Statistics series or the earlier constructed series, which goes back to January 1989. However, there was a larger fall of 2.4 percentage points in April 1992, when the 12-month rate was 4.7%.

“We have recently published modeled consumer price inflation data on an indicative basis for earlier periods,” ONS said. “These new estimates suggest that CPI would last have been higher sometime around 1982, where estimates range between approximately 6.5 % in December to nearly 11% in January.”

Housing and household services contributed 2.76 percentage points to the CPIH 12-month inflation rate in April 2022, of which 1.86 percentage points came from electricity, gas and other fuels.

This was the largest contribution from any division this month, and the largest contribution from housing and household services since the start of the National Statistics series.

The contribution rose significantly in April 2022 as a result of price rises for gas and electricity. This follows the increase in the Office of Gas and Electricity Markets (Ofgem) cap on energy prices, which changed on 1 April 2022.

This followed an earlier rise in the price cap on October 1, 2021, which led to a 1.23 percentage point contribution from housing and household services.

Reference:

Consumer price inflation, UK: April 2022 – ONS – May 18, 2022

Featured image credit: ONS

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