Consumer inflation down to 4.5%

Consumer Prices Index (CPI) annual inflation – the Government's target measure – was 4.5 per cent in October, down from 5.2 per cent in September.

The largest downward pressure on the CPI annual rate came from transport costs where the price of fuels and lubricants fell this year but rose last year. The decrease this year was triggered by a sharp fall in the price of crude oil. The average price of petrol fell by 7.1 pence per litre between September and October this year, to stand at 104.5 pence, compared with a rise of 2.7 pence last year. Diesel prices fell by 7.0 pence per litre this year, to stand at 116.3 pence. There was also a fall in the price of both air transport and sea transport. The effect from air fares came mainly from the cost of European flights.

There was another large downward contribution from food and non-alcoholic beverages. The effect came largely from the price of meat, which fell this year compared with a rise last year. Prices fell for a range of pork products and beef prices fell, with discounting in supermarkets. There was a small downward effect from biscuits and a partially offsetting upward effect from the price of milk.

There were further large downward contributions from:

recreation and culture, where the effect came mainly from pre-recorded DVDs and computer games

miscellaneous goods and services where, overall, bank charges decreased and home delivery charges rose by less than last year

education services where the upward effect from increased tuition fees is less than the previous year

Retail Prices Index (RPI) inflation slowed to 4.2 per cent in October, down from 5.0 per cent in September. The main factors affecting the CPI also affected the RPI. Additionally, there was a large downward contribution from housing with the main effect coming from house depreciation, which is excluded from the CPI.

RPIX inflation – the all items RPI excluding mortgage interest payments – was 4.7 per cent in October, down from 5.5 per cent in September.

As an internationally comparable measure of inflation, the CPI shows that the UK inflation rate in October, at 4.5 per cent, was above the provisional figure for the European Union as a whole of 3.7 per cent.