Understanding the cost of living through statistics

Understanding the cost
of living through
statistics
25 October 2022
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of living through
statistics
Welcome
Michael Hardie
Deputy Director, Prices
Office for National Statistics
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Agenda
9.00am: Registration
9.30am: Chair's welcome – Mike Hardie, Deputy Director, Prices, ONS
9.40am: Opening address – Professor Sir Ian Diamond, National Statistician, ONS
10.00am: Response to opening address – Huw Pill, Chief Economist, Bank of England
10.25am: Current inflation statistical landscape – Matt Corder, Deputy Director, Prices;
and Sonia Carrera, Assistant Deputy Director, Analytical Hub, ONS
10.50am: Analysis of cost of living impacts on different household groups – Abi Casey, Assistant Deputy
Director, Prices, ONS
11.00am: Q&A
11.20am: Break
11.40am: Energy statistics and the cost of living – Tim Vizard, Assistant Deputy Director, Public Policy
Analysis, and Jon Gough, Assistant Deputy Director, Business Insights and Conditions Survey
(BICS), ONS
12.00pm: Q&A
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Agenda
12.15pm: Panel session: Cost of living analytical insights from different perspectives with Q&A
Chair: Sam Beckett, Second Permanent Secretary, ONS
 Charlotte Dendy, Head of Economic Surveys and Data, the CBI
 Ashwin Kumar, Professor of Social Policy, Manchester Metropolitan University
 Afzal Rahman, Policy Officer, the Trades Union Congress
 Morgan Wild, Head of Policy, Citizens Advice
1.15pm: Lunch
1.55pm: How inflation and cost of living statistics are evolving, and the opportunities for transformation
Chair: Sam Beckett, Second Permanent Secretary, ONS
 Peter Levell, Associate Director, Institute for Fiscal Studies
 Omar Guerrero, Head of Computational Social Science research, The Alan Turing Institute
2.25pm: Q&A
2.35pm: How the ONS is transforming consumer price stats – Sofia Poni, Assistant Deputy Director, Prices, ONS
2.45pm: Q&A
2.55pm: Closing remarks – Mike Hardie, Deputy Director, Prices, ONS
3.00pm: Close
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Questions can be submitted via slido using code #251022
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of living through
statistics
Professor Sir Ian Diamond
National Statistician
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of living through
statistics
Huw Pill
Chief Economist
Bank of England
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The current inflation
statistical landscape
Matthew Corder
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Consumer prices
Designed to measure what’s happening in the economy as a whole.
Consumer Prices Index (CPI) – internationally comparable
Consumer Prices Index including owner-occupiers’ housing costs (CPIH) –
more comprehensive and our headline measure
Aggregate
economic
measures

Consumer prices
Designed to reflect the
experiences of different
types of households
Household experience
HCIs – Household Cost Indices
CPIH and CPI Subgroup
analysis
Household
experience

Consumer prices
UK House Price Index
Housing
market
Index of Private Housing Rental Prices

Producer price indices
Output prices – Cost of
items at the factory gate
Imports
costs
Supply
chain
costs
Input prices – Prices
going into factories
(imports and commodities)

Inflation returns to 40 year high
Source: Office for National Statistics – Consumer price inflation
September 2022
CPIH 8.8%
CPI 10.1%
Indicative CPIH and CPI annual inflation rate since 1950
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Inflation driven by rising price for goods…
CPI goods, services and core annual inflation rates, and 2022 CPI goods and services weights (%)
September 2022
CPI 10.1%
CPI Services 6.1%
CPI Goods 13.2%

…reflecting higher business prices
Source: Office for National Statistics – Producer prices
Input and output producer price inflation annual growth rates
September 2022
Input PPI 20.0%
Output PPI 15.9%

What is driving rising costs?
CPI September 2022
All items 10.1%
Food 14.8%
Clothing 8.8%
Transport 10.6%
inc. Petrol 26.5%
Energy 70.1%
Contributions to the annual CPI inflation rate

Energy prices have risen sharply…
Annual CPI inflation rates for energy
• Ofgem price cap introduced
in January 2019
• Energy prices fell during the
pandemic, when
consumption reduced during
lockdowns
• Gas prices fell between
October 2019 and October
2021
September 2022
Electricity 54.0%
Gas 95.7%

…as have fuel and other transport costs
Annual CPI inflation rates for transport and fuel prices
• Petrol and diesel prices rose
steadily following the easing of
lockdown restrictions
• Pump prices reached a peak
of 189.5 pence per litre for
petrol, and 197.9 pence per
litre for diesel in July 2022
• Petrol and diesel prices have
fallen in recent months by
remain 26.5% higher than in
September 2021

Food price inflation is at a 42-year high
Indicative annual CPI inflation rates for food
September 2022
Food 14.5%

Recent trends in inflation
of food production
Sonia Carrera
Assistant Deputy Director
Economic and Cross-Cutting Analysis
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Production and consumer prices for food and beverages have
risen sharply in recent months
60
70
80
90
100
110
120
130
140
150
Price
Indices
2015
=
100
Food input producer prices, food output producer prices and food consumer
inflation (CPIH) indices, Jan 2005 – Sep 2022, UK, 2015 = 100
Food input PPI Food output PPI Food CPIH
Source: ONS, PPI and CPI(H)
Notes: Food input includes beverages and tobacco products; food outputs include outputs of food
products only; food CPIH includes non-alcoholic drinks.
Annual Growth
September 2022
CPIH 14.6%
Input PPI 19.3%
Output
PPI
14.8%

Recent rises in global commodity prices and bottlenecks in
supply chains contributed to increased producer price inflation
Source: World Bank, Commodity Markets (worldbank.org) Source: ONS, Business Insights and Conditions Survey
0
100
200
300
400
500
600
700
800
900
1000
Price
Index
Jan
2020
=
100
Global commodity prices, Jan 2019 - Sep 2022, Jan
2020 = 100
Crude oil, Brent Natural gas index Food
Raw Materials Fertilisers
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
All businesses
Food Retailing
Food Services
Food Wholesaling
Food Manufacturing
Percentage of businesses reporting global supply
chain disruption, UK, August 2022
Notes: Excludes businesses with less than 10 employees

Since the start of 2022 imported inputs into food production
have increased at a faster rate than domestic inputs
Source: ONS, PPI
-20%
-10%
0%
10%
20%
30%
40%
50%
Annual change in imported and domestic producer price inputs of food production, Jan
2005 – Sep 2022, UK
Inputs of Food (Imported) Inputs of Food (Domestic)

During 2022 food production inputs have risen by the highest
levels on record since 2008 for each production food group
Source: ONS, PPI
0% 5% 10% 15% 20% 25% 30% 35%
Preserved Meat and Meat Products
Other Food Products
Dairy Products
Rice, Maize and Flour products
Bakery Products
Vegetable and Animal Oils and Fats
Inputs of Food
Annual change in price (%)
Annual growth in inputs into food production by food group, UK, September 2022
Notes: Food input includes beverages and tobacco products. Data for “other food
products” are available from Jan 2009 onwards

Increased input costs has lead to businesses charging higher
prices for their ‘factory gate’ outputs
70
80
90
100
110
120
130
140
150
Jan-05
Nov-05
Sep-06
Jul-07
May-08
Mar-09
Jan-10
Nov-10
Sep-11
Jul-12
May-13
Mar-14
Jan-15
Nov-15
Sep-16
Jul-17
May-18
Mar-19
Jan-20
Nov-20
Sep-21
Jul-22
Price
Index
2015
=100
Food input PPI Food output PPI
Food input and output Producer Price Indices (PPI), UK,
Jan 2005 to Sep 2022
Source: ONS, Business impacts and conditions survey
Source: ONS, PPI
0% 20% 40% 60% 80%
All businesses
Food Services
Food Retailing
Food Manufacturing
Food Wholesaling
Percentage of business (10+ employees) who have
had to pass on price increases to customers, UK
October 2022
Sep-22
Note: Food input includes beverages and tobacco products;
food outputs include outputs of food products only.

Broad price increases across food production outputs reflected
across food and drinks consumer prices for many items
0% 5% 10% 15% 20% 25% 30% 35%
Sugar, jams and confectionery
Fruit
Fish
Vegetables
Bread and cereals
Meat
Milk, cheese and eggs
Oils and fats
Annual change in selected food products
in CPIH, UK, September 2022
0% 5% 10% 15% 20% 25% 30% 35%
Fruit and Vegtables
Ice Cream
Fish Products
Meat Products
Bread, Pastry and Cakes
Macaroni, Noodles, Couscous…
Potato Products
Flour products
Dairy and Cheese Products
Rice and Maize products
Annual change in food output producer prices for
selected food products, UK, September 2022
Source: ONS, CPI(H)
Source: ONS, PPI

Production and consumer prices for food and beverages have
risen sharply in recent months
60
70
80
90
100
110
120
130
140
150
2005
JAN
2006
APR
2007
JUL
2008
OCT
2010
JAN
2011
APR
2012
JUL
2013
OCT
2015
JAN
2016
APR
2017
JUL
2018
OCT
2020
JAN
2021
APR
2022
JUL
Price
Indices
2015
=
100
Food input producer prices, food output producer prices and food consumer prices
including owner occupiers housing costs (CPIH) indices, Jan 2005 – September
2022, UK, 2015 = 100
Food input PPI Food output PPI Food CPIH
Source: ONS, PPI and CPI(H)
Notes: Food input includes beverages and tobacco products; food outputs
include outputs of food products only; food CPIH includes non-alcoholic drinks,
Annual Growth
September 2022
CPIH 14.6%
Input PPI 19.3%
Output
PPI
14.8%

Analysis of cost of living
impacts on different
household groups
Abi Casey
Assistant Deputy Director, Head of Prices
Development and Responsive Analysis
Prices Division
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Lower income households saw a higher rate of inflation
Annual % growth by equivalised disposable income decile
Source: CPIH-consistent inflation rate estimates for UK household groups, ONS
June 2022
Lowest income (decile 2) - 8.7%
Highest income (decile 9) - 7.8%

Subsidised renters saw a higher rate of inflation
Annual % growth by household tenure status
Source: CPIH-consistent inflation rate estimates for UK household groups, ONS
June 2022
Subsidised renters – 9.8%
Renters – 7.7%
Owner-occupiers – 8.1%

How have prices
changed for the lowest
priced grocery items?

Tracking the lowest price of 30 everyday grocery items
• Highly experimental research, based on web-scraped supermarket data for 30 everyday grocery
items
• The lowest-priced items have increased in cost by around 17% over the 12 months to September
2022, which has increased from 7% over the 12 months to April 2022

Notable variation in price change
Increased by more than 20%
Increased by more than 40%
65%
Vegetable
oil
60%
Pasta
46% Tea

OFFSEN until 7AM 25 October
There was a
substantial range of
price movement for
the lowest prices

Sep 2021
to Sep
2022
65% April 2022
to Sep
2022
46%
Vegetable oil
In the 12 months to
September 2022,
increased £1.02 per
litre on average to
£2.58
0
20
40
60
80
100
120
140
160
180
April 2021=100

Sep 2021
to Sep
2022
60% April 2022
to Sep
2022
14%
Pasta
0
20
40
60
80
100
120
140
160
180
200
In the 12 months to
September 2022,
increased 23p per 500g
on average to 61p
April 2021=100
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Some prices showed a decrease
0
20
40
60
80
100
120
140
Beef Mince Fruit juice orange
In contrast the largest average fall in the
lowest averages prices measured
between September 2021 and
September 2022 were:
 Beef mince (down 15 pence to
£1.95 pence for 500g)
 Fruit orange juice (down 7 pence
to 76 pence for 1 litre)
It is important to consider that for each
of the 30 items, the overall figure can be
made up of different price movements
at the product level
April 2021=100

Follow a broadly similar trend to the equivalent official
measure of inflation for food and drink
90
95
100
105
110
115
120
Lowest cost grocery items CPIH (Food and non-alcoholic beverages)
• Broadly in line with official measures of
inflation across the year
• For 15 of the 30 sampled items monitored the
average lowest price, across the retailers,
increased at a faster rate than the latest
measures
Caution should be taken when comparing to the
official measure as the official consumer price
inflation measure for food and non-alcoholic
beverages contains more items than the 30
items used in this analysis.
Lowest cost grocery items, April 2021=100

Q&A

of living through
statistics
Break
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Energy statistics and
the cost of living
Tim Vizard
Assistant Deputy Director, Public Policy Analysis
Jon Gough
Business Insights and Conditions Survey (BICS)
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Cost of living – Public
opinions and social
trends from the Opinions
and Lifestyle Survey
Tim Vizard
ONS Analytical Hub
@TimVizardONS (Twitter)

Opinions and Lifestyle Survey
• Fortnightly online survey of around 2,000 to 2,500 adults each wave
• Timely data (survey closes on a Sunday, published on Friday)
• Covers a range of issues facing British society today:
Environmental Issues
Health and well-being
COVID-19 Working arrangements
Cost of living

Source: ONS Public Opinions and Social trends
Public attitudes to cost of living (November 2021 to
September 2022)
Between 31 August to 11
September 2022:
• 87% adults reported their cost of
living increased over last month
• 82% reported being very or
somewhat worried about the
rising cost of living in last 2
weeks.
• 48% reported they do not think
they will be able to save any
money in next 12 months
percent
0
10
20
30
40
50
60
70
80
90
100
% reporting their cost of living has increased over the last month
% worried about rising costs of living in the last two weeks
% reporting they do not think they will be able to save any money in the next 12 months

Actions people are taking due to the rising cost of
living (29 September to 9 October 2022)
2
7
8
12
24
24
40
40
41
63
66
0 10 20 30 40 50 60 70
Using support from charities, including food banks
Doing other things
None of these
Using credit more than usual, for example, credit cards,…
Making energy efficiency improvements to my home
Using my savings
Spending less on food shopping and essentials
Cutting back on non-essential journeys in my vehicle
Shopping around more
Using less fuel such as gas or electricity in my home
Spending less on non-essentials
percent

New data out today: looking at difficulty affording
energy bills, rents or mortgages payments
Age and sex
Energy bill type
Region
Urban / rural areas
Disability
Ethnicity
Employment status
Personal income
Deprivation
Highest education level
Household size
Parental status
Marital status
Housing tenure
Source: Impact of increased cost of living on adults across Great Britain:
June to September 2022
Covering a range of characteristics:

Increasing numbers of adults finding it difficult to
afford energy bills, rents or mortgages
In June to September 2022:
 45% who paid energy bills reported it being
difficult to afford them (up from 40% in
March to June 22)
 30% of adults who were paying rent or had
mortgage payments reported finding it
difficult to afford these payments (up from
26% in March to June 22)
Awaiting Chart
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Adults who pay their energy bills by prepayment more
likely to report difficulties paying energy bills
This rose to 7 in 10 (72%) of adults who pay their energy bills by prepayment
Around 4 in 10 (42%) adults who paid their energy bills by direct debit or
one-off payments reported difficulties paying their energy bills
Note: based on data collected between 29 September to 9 October 2022
@ONSfocus
Source: Impact of increased cost of living on adults across Great Britain: June to September 2022

Disabled adults more likely to find it difficult to afford
their energy bills, and rent/mortgage payments
 Over half (55%) of disabled
adults reported difficulty
affording their energy bills
(40% non-disabled adults)
 Around 1 in 3 (36%) of
disabled adults reported
difficulty affording their rent or
mortgage payments (27%
non-disabled adults)
@ONSfocus

Differences by ethnicity in difficulty affording energy
bills, and rent/mortgage payments
 7 in 10 (69%) of Black or
Black British adults reported
difficulty affording their
energy bills
 Around half (52%) of Black
or Black British adults
reported difficulty affording
their rent / mortgage
payments
@ONSfocus

Renters were more likely report difficulty in affording
energy bills
Around 6 in 10 (60%) renters
reported difficulty affording their
energy bills in June to
September 2022.
This compared with:
 around 4 in 10 (43%) of
those with a mortgage
 a third (35%) of those who
owned their home outright
@ONSfocus

What’s next?
• Opinions and Lifestyle Survey data
presented today does not yet fully
capture increases to interest rates
(and mortgage rates), and the
increase to the October energy
price cap.
• We will continue to monitor impacts
of cost of living in our fortnightly
Public Opinions and Social
Trends.

Business perspective –
Business Insights and
Conditions Survey
Jon Gough
Business Insights and Conditions Survey (BICS)
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What is BICS
• The ONS created a new innovative
fortnightly business survey, initially to
monitor the impact of COVID-19,
now geared towards assessing
business sentiment
• The BICS voluntary fortnightly
business survey has provided us
with a rapid and flexible survey to
respond quickly to changing policy
needs
• Detailed results are published each
fortnight with headline figures
published each week in a Faster
Indicators (now called RTI) bulletin
Financial
performance
Workforce
size
Furlough
Grants and
Schemes
EU Exit
International trade
& supply chains
Net zero
Shortage of workers
Global supply
chains
Increase in prices
(energy)

Inflation and energy prices are the main concerns for businesses
0%
5%
10%
15%
20%
25%
30%
35%
40%
Business
rates
Competition Energy prices Exchange
rates
Inflation of
goods and
services
prices
Interest rates Supply chain
disruption
Taxation Other Not sure No concerns
for the
business
Main business concerns, referencing 1 October 2022 to 31 October 2022
All businesses Businesses with 10 or more employees
Source: The Business Insights and Conditions Survey (BICS)

Of the 34% of businesses who pay
electricity bills on a fixed or hedged
term:
• 18% expect their electricity costs to
increase by 300% when their
contracts expire
• A further 37% expect their electricity
costs to at least double
0% 5% 10% 15% 20% 25% 30% 35%
Do not expect business's energy bill to increase
Not sure
Between 1-99%
Between 100-199%
Between 200-299%
More than 300%
Energy bills expectations after businesses energy contracts expire, referencing 20
September 2022 to 2 October 2022
All businesses - Electricity All businesses - Gas
Energy bill expectations – rises expected

What are the factors behind consideration of price rises?
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Energy prices Finance costs Labour costs Raw material
prices
Other Not sure Business is
not
considering
raising prices
Factors behind consideration of
price rises in November 2022, all businesses
0% 10% 20% 30% 40% 50% 60% 70% 80%
Manufacturing
Construction
Wholesale and retail trade; repair of…
Transportation and storage
Accommodation and food service…
Information and communication
Real estate activities
Professional, scientific and technical…
Administrative and support service…
Education
Human health and social work activities
Arts, entertainment and recreation
Other service activities
All businesses
Energy prices as a factor behind consideration of price
rises in November 2022 by industry

Higher business costs – passed on to customers?
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
All businesses
Accommodation and food service activities
Manufacturing
Wholesale and retail trade; repair of motor vehicles and motorcycles
Construction
Administrative and support service activities
Education
Professional, scientific and technical activities
Passing on higher business costs to customers, 1 September 2022 to 30 September 2022
Business has not passed through any higher costs Passed through 50% or more of higher costs Passed through less than 50% of higher costs Not sure

Prices of goods and services – bought and sold
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
All businesses
Manufacturing
Education
Construction
Prices bought, whether increased compared with previous month, comparison of June 2022 against September 2022
Prices bought increased - June 2022 Prices bought increased - September 2022

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
All businesses
Manufacturing
Education
Construction
Prices sold, whether increased compared with previous month, comparison of June 2022 against September 2022, plus
price expectations for November 2022
Prices sold increased - June 2022 Prices sold increased - September 2022 Prices will increase in November 2022
Prices of goods and services – bought and sold

BICS – looking ahead
• Will continue to ask questions related to energy and cost of living from a business
perspective, report on fortnightly basis
• Questions to be asked in late October/November 2022 include
o To what extent has your business already passed through higher costs to prices?
o What actions, if any, has your business taken to reduce energy costs in the last three
months? (new question)
o What actions, if any, does your business plan to take to reduce your energy costs in
November 2022? (new question)
o Which of the following, if any, will be the main concern for your business in
November/December 2022?
o Which of the following factors, if any, are causing your business to consider raising
prices in November/December 2022?

Panel session: Cost of
living analytical
insights from different
perspectives
Chair – Sam Beckett
Second Permanent Secretary
Joint Head of the Government Economic Service
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Panel members
• Charlotte Dendy, Head of Economic Surveys and Data, the CBI
• Ashwin Kumar, Professor of Social Policy, Manchester Metropolitan University
• Afzal Rahman, Policy Officer, the Trades Union Congress
• Morgan Wild, Head of Policy, Citizens Advice
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of living through
statistics
Lunch
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How inflation and cost of
living statistics are evolving,
and the opportunities for
transformation
Chair – Sam Beckett
Peter Levell
Associate Director, Institute for Fiscal Studies
Omar Guerrero
Head of Computational Social Science research
The Alan Turing Institute
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@TheIFS
Measuring the cost of
living crisis
Peter Levell, IFS

 (Quiet) revolution underway in the way consumer price statistics are
collected
 For many decades, prices have been collected in the same way
 Manual collection of prices for 700 representative items
 Around 180,000 prices collected each month
 This is rising to hundreds of millions of price quotes collected directly
from retailers
 What does this mean?
 Large sample sizes
 Higher frequency (month to month price changes)
 Can include seasonal goods
 Greater opportunities for stratification by region
Measuring the cost of living crisis © Institute for Fiscal Studies
Big changes in the way prices are being
collected

What about inflation for different
groups?

Inflation by income decile
Inflation
rate
Source: Karjalainen, Levell and Waters (2022)

Aggregation matters
Source: Jaravel (2021)
 Uses approximately 96 categories of goods
 But this can miss important subtleties
 E.g. prices of different types of pasta changing in different ways

Can more data help?
 ONS used new data to
produce “lowest cost-indices”
 Increased at similar rate to
average food prices
 But need to weight by
importance in budgets
 Can’t do that without spending
weights

Can more data help?
 More detailed price quotes can give better indication of how prices
are changing
 But crucially also need information on spending weights – how
much do poor spend on each good than the rich
 This cannot be answered by point-of-sale data alone
 Solution – household scanner data
 Individuals within a survey scan bar codes of items they
purchased
 Collect demographic and income data on respondents
 Both detailed and timely
 O’Connell and Jaravel (2020) used during COVID lockdown

Summary
 More detailed data means, more accurate, high frequency data with
greater stratification by region
 But need information on different households’ spending to better
understand how inflation is affecting different households
 Household scanner data offers greater sample sizes and more
detail than conventional budget surveys
 Additional points:
 More data also allows for better treatment of quantity discounts
 More information on which product lines are appearing and
disappearing could also shed important new insights

The Institute for Fiscal Studies
7 Ridgmount Street
London
WC1E 7AE
www.ifs.org.uk

The Alan Turing Institute @guerrero_oa 77
Dr Omar A Guerrero
Head of Computational Social Science Research
The Alan Turing Institute
How data + AI can help understanding
inequality and enhancing policymaking

The Alan Turing Institute @guerrero_oa
Popular views of inequality
78
Source: Tuca Vieira (São Paulo,2004)

Inequality as the outcome of a process
79
• Inequality is the result of dynamics between individuals
and organisations
• Financial transactions, consumption, employment relationship, housing
decisions, etc.
• Quantifying micro-level dynamics can help understanding
why certain inequalities arise
• Reinforcement of privileges, “rich-gets-richer” effects, virtuous or vicious
cycles, etc.
• Statistical products show us the outcome of these
process, but not their micro-mechanisms

Why AI?
80
• As data becomes more granular and social scientists document more
evidence about micro-level mechanisms, it becomes more difficult to
develop dynamic models
• Heterogeneous agents
• Bounded rationality
• Disequilibrium dynamics
• Decentralised interactions
• Complex interaction topologies
• Policy evaluation and design often demand a systemic view and
nuanced counterfactuals

An example: a housing market model
price
quantity
• We were interested in studying the
emergence of housing wealth inequality
• We wanted a model at a one-to-one scale
with the UK household population
• Household characteristics would be drawn
from ONS microdata
• Households would be autonomous and
interact with each other, giving place to
real-world housing prices and inequality
• ¿What is the effect of popular policies
such as increasing housing supply?
81

It’s not that simple!
82
Source: Guerrero (2020) Decentralized markets and the emergence of housing wealth inequality
percent increment in housing stock

83
Thank you!
oguerrero@turing.ac.uk
@guerrero_oa

Q&A
slido #251022
#CostOfLiving
@ONSfocus

Transformation of UK
consumer
price statistics
Sofia Poni
Consumer Prices Transformation, Prices Division
slido #251022
#CostOfLiving
@ONSfocus

• Obtaining robust sources of alternative data, including
web-scraping and scanner data
• Researching methodologies to most effectively
incorporate the data
• Developing statistical systems
• Embedding new processes
This will be a continuous programme of improvements for
consumer price statistics, allowing us to improve the
accuracy, efficacy and representativity of consumer price
inflation statistics.
Primarily, new data will help us to inform the narrative
around what is driving inflation for our users
Consumer prices transformation: Alternative data sources

Data, methods and systems

We've acquired extensive groceries data
• Data from retailers accounts for
about 50% of the UK grocery
market share
• Co-op publicly announced their
collaboration with us in last year
• The remainder would give us 80%
of UK grocery market share
• Working to resolve challenges with
reluctant retailers
through engagement with industry
bodies

And rail fares and second-hand cars data
• Doesn't require added
functionality - we can incorporate
into headline statistics from 2023
• Autotrader and Rail Delivery
Group publicly announced our
partnership in April, in the The
Times

And private rental prices microdata
• Data collected by rent
officers across the
country for the devolved
administrations
• Allows us to improve our
methodology to calculate
rental price statistics

We've researched world-leading methodologies
• Biannual series of research updates, most recently on multilateral index
number methods, aggregation and product grouping
• International and domestic conferences on statistics
• Next publications on 28 November
• Impact analysis of rail fares and second-hand cars on headline CPIH and CPI
• Accessible summary of multilateral index number methods
• Explanation of our reproducible analytical pipeline
• Data cleaning methods

CPIH and CPIH with new data
• Between February 2018 and
November 2021, the inclusion of new
data for second-hand cars and rail
fares in both the CPIH and CPI
resulted in a relatively small impact
• But the key benefit of the new data
sources is the depth of understanding
on what is driving consumer prices
trends
Rail fares, Source: ONS
Second-hand cars, Source: ONS

Informing the narrative

Offering greater insights: rail fares
Source: ONS Source: ONS

Offering greater insights: second-hand cars
Source: ONS Source: ONS

What comes next?

Consumer prices transformation timeline
January 2022 June to Nov 2022 March 2023
November 2022
APCP review findings
from preliminary
impact analysis
Research and
experimental headline
inflation indices with
new data publication
Go/no-go decision
Final impact assessments
to determine suitability of
new data for rail fares
and used cars
Rail fares and used
cars new data goes
into live production

Consumer prices transformation timeline
March 2023 November 2023 January 2025
March 2024
Go/no-go decision
Final impact assessment
to determine suitability of
new data for groceries
Rail fares and used
cars new data goes
into live production
Rolling programme
Further capability drops
for priority categories
Grocery scanner
and private rents
data into live
production

of living through
statistics
Closing remarks
Michael Hardie
slido #251022
#CostOfLiving
@ONSfocus

Feedback
slido #251022
#CostOfLiving
@ONSfocus

Thank you for attending the
Understanding the cost of living
through statistics event
You can keep up to date on all upcoming events via ons.gov.uk/economicevents
If you would like to ask a question or provide any feedback, please do so via
economic.engagement@ons.gov.uk
slido #251022
#CostOfLiving
@ONSfocus

Understanding the cost of living through statistics

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