The document examines trends in consumer price inflation in the UK economy over time. It shows that inflation has varied from just under 1% to slightly over 5% since 1997, with an inflation target of 2% set by the Bank of England. Various charts break down inflation trends for different goods and services, as well as public expectations for future inflation. Housing, fuel and food costs make up a significant proportion of the weighted Consumer Price Index. Crude oil prices are also seen to correlate with changes in overall consumer price inflation.

1. Consumer Price Inflation for the UK Economy
Percent
Annual percentage change in the Consumer Price Index
5.5
5.5
5.0
5.0
4.5
4.5
4.0
4.0
3.5
3.5
3.0
3.0
2.5
2.5
2.0
2.0
CPI Inflation target = 2%
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
Source: UK Statistics Commission

2. Inflation Expectations
Bank of England/NOP, how do you expect prices to change over the next 12 months?
6.0
5.0
5.0
4.0
Percent
6.0
4.0
3.0
3.0
2.0
2.0
1.0
1.0
0.0
0.0
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
Q1
Q3
06
07
08
09
10
11
How do you expect prices to change over the next 12 months?
United Kingdom, Consumer Prices, By Commodity, All items (CPI), Chg Y/Y
Q1
Q3
12
Q1
13
Source: Bank of England

3. Consumer Price Inflation in Europe and the UK
Percent
Annual percentage change in consumer prices
6
6
UK
5
5
4
4
3
3
2
2
1
1
Euro Zone
0
0
-1
-1
05
06
07
08
09
10
11
12
13
Source: Reuters EcoWin

4. Changing Real Prices for Goods and Services
Retail Price Index, January 1988 = 100
600
500
500
400
Index
600
400
Cigarettes
300
Rail fares
300
Repairs
200
200
All goods and services
Clothing and footwear
100
100
Electrical appliances
0
0
88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Monthly Digest and Statistics

5. Electricity and Gas Prices compared with changes in the CPI
Index of consumer prices, 2005=100
250
250
225
225
200
200
Gas Prices
175
Index
175
150
150
Electricity Prices
125
125
Consumer Price Index (all items)
100
100
75
75
05
06
All items (CPI)
07
Gas
08
09
10
11
12
13
Electricity
Source: Reuters EcoWin

6. Consumer Price Inflation and Interest Rates for the UK
Annual percentage change in the UK Consumer Price Index, the inflation target is 2%
6
6
Base Interest Rates
5
5
Percent
4
4
3
3
2
2
Consumer Price Inflation
1
1
0
0
04
05
06
07
08
09
10
11
12
13
Source: Reuters EcoWin

7. Price Deflation for Selected Items
Consumer price index, monthly value, 2005=100
170
170
160
160
150
150
140
140
Audio-Visual Equipment
130
120
Index
130
120
110
110
100
100
Clothing and Footwear
90
90
80
80
70
70
60
60
50
50
40
40
00
01
02
03
04
05
06
07
08
09
10
11
12
13
Source: Reuters EcoWin

8. Consumer Price Inflation for Goods and Services
Annual Percentage Change in Prices
6
6
Inflation in Services
5
5
4
3
Percent
4
3
2
2
1
1
0
0
-1
-1
-2
Inflation in Goods
-2
-3
-3
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
Source: Reuters EcoWin

9. Selected Weights in the UK Consumer Price Index
Total weights for the CPI = 1000. Source: Office of National Statistics
150
150
125
125
Housing, water and fuels
1996=100
100
100
Foods
75
75
Clothing and footwear
50
50
Alcohol, tobacco and narcotics
25
25
Education
0
0
03
04
05
06
07
08
09
10
11
12
13
Source: UK Statistics Commission

10. UK Inflation and Crude Oil Prices
Annual % change in the Consumer Price Index and the world crude price
US dollars per barrel of oil
150
150
Crude Oil Price
100
100
50
50
0
0
6.0
6.0
Consumer Price Inflation
5.0
4.0
Percent
5.0
4.0
3.0
3.0
2.0
2.0
1.0
1.0
0.0
0.0
07
08
09
10
11
12
13
Source: UK Statistics Commission and IPE