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Prices unchanged on the year

Released: 14 July 2015 Download PDF

Figure A: Contribution of food and motor fuel prices to the annual CPI rate of inflation: January 2007 to June 2015

United Kingdom

Figure A: Contribution of food and motor fuel prices to the annual CPI rate of inflation: January 2007 to June 2015
Source: Office for National Statistics

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Prices faced by households are unchanged over the year to June 2015 compared with a 0.1% rise in prices in the year to May. This means that a basket of goods and services that cost £100.00 in June 2014 would have still cost £100.00 in June 2015. This continues the trend of recent months when inflation has been at or around 0.0%.

While some prices (such as for motor fuels, audio/visual and related equipment, and food) are lower than they were a year ago, others (such as for restaurant and hotel services and rents) are higher. Taken as a whole, prices for services increased by 2.2% in the year to June 2015 while prices for goods decreased by 2.0%. Historically, price movements for food and motor fuels have been among the main causes of inflation. However these 2 groups, along with audio-visual and related equipment, have had the largest downward pull on inflation in each month of 2015. In the year to June, food prices fell by 2.2% and prices of motor fuels fell by 10.5% so that in total, they reduced the CPI 12-month rate by approximately 0.6 percentage points. Decreases in the price of oil, lower commodity prices and increased competition among the supermarkets are all possible contributing factors. Figure A shows the contribution of changing food and motor fuel prices to the rate of inflation.

The main downward push on inflation between May and June 2015 (causing it to fall slightly from 0.1% to 0.0%) came from decreases in clothing and food prices along with smaller rises in air fares than a year ago. Clothing prices fell as usual between May and June this year as summer sales began but a year ago, average prices rose between the 2 months with the main effect coming from a variety of women’s outerwear. Within food, the price falls came principally from bread and cereals and sugar, jam, syrups, chocolate and confectionery (particularly bags of sweets). Changes in air fares for European routes had the largest downward effect in the air transport category.

Source: Office for National Statistics

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