Inflation Rate Sept 2024

This month the ONS (Office for National Statistics) reported that in September 2024, UK inflation fell to its lowest level in several years, with the Consumer Prices Index including owner occupiers’ housing costs (CPIH) dropping to 2.6%, down from 3.1% in August. This marks a significant decrease from its October 2022 peak of 9.6%. The fall was driven by reductions in transport costs, especially airfares and motor fuel, which saw a notable 2.4% decrease year-on-year. Meanwhile, food and non-alcoholic beverages inflation rose slightly to 1.8%, the first increase since March 2023, although still much lower than last year’s rates.

The overall Consumer Prices Index (CPI) dropped to 1.7% in September, down from 2.2% in August, showing that inflationary pressures have continued to ease across the economy. The falling costs in transport and clothing offset rising prices in housing and food.

The ONS summarised:

• The Consumer Prices Index (CPI) rose by 1.7% in the 12 months to September 2024, down from 2.2% in August.

• The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 2.6% in the 12 months to September 2024, down from 3.1% in August.

• On a monthly basis, CPIH rose by 0.1% in September 2024, down from 0.5% in September 2023.

• On a monthly basis, CPI was little changed in September 2024, down from a rise of 0.5% in September 2023.

• The largest downward contribution to the monthly change in both CPIH and CPI annual rates came from transport, with larger negative contributions from air fares and motor fuels; the largest offsetting upward contribution came from food and non-alcoholic beverages.

• Core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.0% in the 12 months to September 2024, down from 4.3% in August; the CPIH goods annual rate fell from negative 0.9% to negative 1.4%, while the CPIH services annual rate fell from 5.9% to 5.6%.

• Core CPI (excluding energy, food, alcohol and tobacco) rose by 3.2% in the 12 months to September 2024, down from 3.6% in August; the CPI goods annual rate fell from negative 0.9% to negative 1.4%, while the CPI services annual rate fell from 5.6% to 4.9%.

These trends indicate that inflation is cooling, bringing some relief to consumers, but certain areas like housing costs and food still show upward pressure.

Source: ONS