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Summary
- The consumer prices index (CPI) based inflation jumped to 0.7 per cent in January from 0.6 per cent in December 2020.
- A rise in food prices steered a marginal increase in the inflation in January with price rise in furniture, household goods, etc.
UK consumer prices index (CPI) based inflation jumped to 0.7 per cent, while the consumer prices index including owner occupiers’ housing costs (CPIH) grew to 0.9 per cent in the month of January with recreation and culture contributing the most. A rise in food prices steered a marginal increase in the inflation in January.
The price hike in furniture, household goods, restaurants and hotels, and transport also had the major upward contributions to the change in January’s inflation figures. According to Jonathan Athow, Deputy National Statistician for Economic Statistics, ONS, less discount on items such as beddings and settees pushed up the prices of household goods. “There were widespread January sales, with particular cuts for clothing and footwear,” Athow said.
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UK CPI inflation: Key highlights
- The CPI in the 12 months to December 2020 came in at 0.6 per cent, up from 0.3 per cent in November.
- About 69 CPIH items, accounting for 8.3 per cent of the basket by weight, remained unavailable due to the increased set of restrictions on the back of national lockdown in January 2021.
- The number of CPIH items that were unavailable stood at 9 in December, while the number was 72 in November.
- A weighted total of 88.2 per cent of the comparable coverage before the first lockdown was taken into account for the January price collection, the ONS said. According to the ONS, the coverage weight is based on the January weights that have been adjusted accordingly to better reflect the expenditure in 2020.
- For the calculation CPIH and CPI, the ONS imputed the price movements based on all available items price movement of the CPI.
- In order to ascertain that both CPIH and CPI are constructed from the same set of item indices, the ONS has used the CPI price movement for both.
- For an approximate of 20 per cent of the price quotes in our CPIH sample, the price quotes have been collected by the ONS staff or from administrative data.
- Due to the ongoing repercussions due to the coronavirus pandemic, all the unavailable items tend to be in divisions where lower expenditure was recorded in 2020.
- As per the ONS, there were challenges around some of the collection activities between April and July 2020, as nearly 80 per cent of the price quotes were usually collected physically from the stores across 141 locations in the UK.
- The ONS started using a combination of internet, email and phone, for obtaining the price quotes for the locations after the government reintroduced the restrictions across the UK in November 2020.
- With the variety of restrictions in place across the UK in December 2020, the ONS staff physically visited the prices from stores.
