UK consumer price inflation dips, but fashion prices still rising fast
UK consumer price inflation eased somewhat in August. But while it dipped from the double-digit levels seen recently, it's still stubbornly high. And fashion prices continue to rise.
The Office for National Statistics (ONS) on Wednesday reported inflation back in single-digits as some essentials prices rose more slowly.
But the fact is, regardless of essentials price inflation rising faster or more slowly compared to the levels in the past few months, it’s still at historic highs. That means consumers are being hit by the kind of price rises they haven't seen for decades in the essentials they use in their daily lives and so have less money available to spend on non-essentials.
And of course, those non-essentials are seeing their own significant price rises and unlike some other aspects of inflation, those rises accelerated last month. The annual rate for clothing and footwear was +7.6% in the year to August 2022, up from +6.6% in July. Prices rose by 1.1% month on month, compared with a smaller rise of 0.2% in August 2021.
Prices normally rise at this time of year as the autumn ranges enter the shops following the summer sales season. However, the pandemic affected the standard seasonal pattern in 2021 (and 2020), and the 0.2% rise in 2021 was the lowest July to August movement since a 0.2% fall between July and August 1992 in the constructed historical series.
The increase in the annual rate between July and August 2022 came principally from men’s and women’s clothing, where prices rose between July and August 2022 but fell between the same two months a year ago.
Looking at overall inflation, the ONS said that the Consumer Prices Index (CPI) rose by 9.9% in the 12 months to August 2022, down from 10.1% in July.
The index when owner occupiers’ housing costs are included (CPIH) rose by 8.6% in the period, down from 8.8% in July.
On a month-on-month basis, CPI rose by 0.5% in August this year, compared with a rise of 0.7% in August 2021 and CPIH rose by 0.5%, compared with a rise of 0.6% this time last year.
The largest upward contributions to the annual CPIH inflation rate this time came from housing and household services (principally from electricity, gas and other fuels, and owner occupiers’ housing costs), transport (principally motor fuels), and food and non-alcoholic beverages.
The slowdown in the upward figures was largely due to falling petrol prices, although rising food prices still made the largest upward contribution to the inflation rate.