UK inflation reporting gets a seasonal overhaul for clearer trends
The Office for National Statistics (ONS) has updated how it reports seasonal inflation trends. New recommendations now shape the way Consumer Prices Index (CPI) and CPI including Housing Costs (CPIH) data are adjusted and presented each month. These changes aim to improve clarity on monthly inflation shifts, particularly during periods of sharp rises or falls.
Inflation in the UK follows clear seasonal patterns. Prices tend to drop sharply in January and July, while December and June often see significant peaks. To better reflect these trends, the ONS has revised its approach to seasonal adjustments.
The updated method splits the CPI and CPIH series into two parts. Values before 2015 remain unchanged, while data from 2015 onwards are now adjusted monthly. This ensures the most recent figures stay aligned with current economic conditions. The ONS also recommends revising all seasonally-adjusted series each month, focusing on the 2015-to-present period. Monthly CPI Bulletins will now highlight the current month-on-month inflation rate. This figure will be compared to what is considered ‘normal’ for that time of year. Tables 58 and 59, which track these adjustments, will be updated every month as usual. An extra section in the bulletin will compare the past year’s seasonally-adjusted data with the original series. It will also note any major revisions. Currently, the ONS uses direct estimation for all seasonal adjustments, except for Division 4 (housing, water, electricity, gas, and other fuels). If indirect estimation is introduced later, it will be rolled out gradually, only after direct estimates have been published for a while. These updates follow international guidelines from the United Nations, Eurostat, and the ONS itself. The goal is to provide a more accurate and timely picture of inflation movements.
The revised system means monthly inflation reports will now include clearer comparisons to seasonal norms. The ONS will keep updating its seasonal adjustments each month, ensuring the data reflects recent economic shifts. These changes apply to all CPI and CPIH series from 2015 onwards, while earlier figures remain unchanged.
