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| UK inflation since 1948 | UK inflation since 1948 |
| (2 months later) | |
| How pay has fallen behind inflation | How pay has fallen behind inflation |
| UK inflation fell to 2.2% in October, down from 2.7% the month before, the Office for National Statistics (ONS) revealed today. The ONS state that the "largest contributions to the fall in the rate came from the transport (notably motor fuels) and education (tuition fees) sectors."Katie Allen writes today: | |
| Inflation has dropped to its lowest rate in more than a year, catching financial markets offguard and pushing back bets that interest rates in the UK will rise any time soon. | |
| The rise in the cost of living was just 2.2% in October, down from 2.7% the month before as measured on the consumer price index. That was well below City economists' forecasts for 2.5% and almost back at the Bank of England's government-set target of 2%. | |
| There is more than one method of measuring inflation. Up until recently, we were mostly concerned with the consumer price index (CPI) measure - which is the government's favoured one. In September 2011, when the CPI stood at 5.2%, it had never been higher in recorded history. The CPI is important because it is used for uprating pensions, wages and benefits. | There is more than one method of measuring inflation. Up until recently, we were mostly concerned with the consumer price index (CPI) measure - which is the government's favoured one. In September 2011, when the CPI stood at 5.2%, it had never been higher in recorded history. The CPI is important because it is used for uprating pensions, wages and benefits. |
| The second measure is the retail price index (RPI) which has now been dumped as a national statistic (although the ONS will keep publishing it for a while). | The second measure is the retail price index (RPI) which has now been dumped as a national statistic (although the ONS will keep publishing it for a while). |
| Instead we now have CPIH, which includes owner occupiers' housing costs and RPIJ - the new version of the Retail Prices Index (RPI). If you're interested, the old RPI measure is 2.6% down from 3.2% in September. | |
| This is how the indexes compare: | This is how the indexes compare: |
| We have also added in pay data - and you can see how inflation has been racing ahead of average earnings. Even with the falls in previous months, people's wages are not increasing as fast as the cost of living. | We have also added in pay data - and you can see how inflation has been racing ahead of average earnings. Even with the falls in previous months, people's wages are not increasing as fast as the cost of living. |
| There are some important differences between the two ways the ONS measures inflation. The government prefers the consumer price index, which also includes services, housing, electricity, food, and transportation, but the retail price index covers more items. The RPI includes housing costs and is used for many pay negotiations and used to be used for pension payments. We've included both here - just click on the links on the spreadsheet. You can get the full list of items in the inflation basket here. | There are some important differences between the two ways the ONS measures inflation. The government prefers the consumer price index, which also includes services, housing, electricity, food, and transportation, but the retail price index covers more items. The RPI includes housing costs and is used for many pay negotiations and used to be used for pension payments. We've included both here - just click on the links on the spreadsheet. You can get the full list of items in the inflation basket here. |
| If you want to see how different elements of inflation have changed, check out this interactive data explorer from Timetric. | If you want to see how different elements of inflation have changed, check out this interactive data explorer from Timetric. |
| We have gathered all the data for inflation since June 1948. Let us know what you can do with this data. | We have gathered all the data for inflation since June 1948. Let us know what you can do with this data. |
| To find out more about how RPI and CPI differ, explore this set of interactive charts. The graphics show a breakdown of the different measures and components of inflation, and you can compare rates between countries. | To find out more about how RPI and CPI differ, explore this set of interactive charts. The graphics show a breakdown of the different measures and components of inflation, and you can compare rates between countries. |
Download the data | Download the data |
| DATA: UK inflation since the 1940s - CPI and RPI INTERACTIVE: how we visualised the data | DATA: UK inflation since the 1940s - CPI and RPI INTERACTIVE: how we visualised the data |
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