Furniture prices fell in July as overall inflation returned above the Bank of England’s 2% target.
According to the latest Office for National for National Statistics (ONS) data, the Consumer Prices Index (CPI) rose by 2.2% in the 12 months to July 2024, up from 2.0% in June 2024. On a monthly basis, CPI fell by 0.2% in July 2024, compared with a fall of 0.4% in July 2023.
The largest upward contribution to the monthly change in both CPIH and CPI annual rates came from housing and household services where prices of gas and electricity fell by less than they did last year; the largest downward contribution came from restaurants and hotels, where prices of hotels fell this year having risen last year.
Furniture and furnishing prices fell by 2.6% in July, up from a decline of 2.2% in June, while down from a 5.6% rise compared to the same month last year.
The retail price of household furniture decreased by 2.4% in the month, down from a fall of 2%, while down from 6% last year.
Garden furniture prices fell 18.1%, down from 19.5% on last month and down from a rise of 0.2% compared to last year.
Carpets and other floorcoverings prices fell 0.6%, compared to fall of 0.9% the previous month, while lower than the 9.9% rise last year.
Other household textile prices, including furnishings fabrics, curtains and bedding, saw prices rise by 0.7%, down from 0.9% the previous month, while down from 4.7% on last year.
Meanwhile, Producer Price Inflation (PPI) saw the rate of furniture output prices, factory gate, rise 2.1% in July on the same month in the previous year. The rate was lower than the rise of 1.7% in June. Furniture input prices, material cost of production, were flat when compared to the -0.2% decline from June.
Producer input prices rose by 0.4% in the year to July 2024, compared with a revised annual growth rate of 0.0% in June 2024. Producer output (factory gate) prices rose by 0.8% in the year to July 2024, down from a revised increase of 1.0% in the year to June 2024. On a monthly basis, producer input prices fell by 0.1%, while output (factory gate) prices saw no change in July 2024.
Commenting on the inflation figures for July, ONS Chief Economist Grant Fitzner said: “Inflation ticked up a little in July as although domestic energy costs fell, they fell by less than a year ago. This was partially offset by hotel costs, which fell in July after strong growth in June.
“The increase in cost of goods leaving factories slowed a little in the year to July, led by falling petrol prices. Meanwhile, raw materials prices picked up for the first time in over a year, driven by smaller falls in gas and electricity costs.”
Responding to the latest CPI inflation figures, Kris Hamer, Director of Insight of the British Retail Consortium, said: “Despite prices falling month-on-month, headline inflation returned above the Bank of England’s 2% target. This was mainly driven by slowing deflation for gas and electricity bills, which had seen big price drops in July 2023 compared to this year. Food inflation was unchanged, after falling for the preceding 15 months, as increasing commodity costs over 2024 began to filter into prices, however key ingredients like rice and olive oil did see a welcome price drop on the previous month. There was also good news across wider retail, with prices for clothing, furniture and household appliances all down on the month before.
“With headline inflation showing signs of rising further, retailers face the prospect of another large rise in business rates next year, which are based on September inflation rates. This penalises the retail industry, as retail products currently have generally lower inflation levels than the headline figure on which business rates rises are based. The Government should buy into retail by ending the 14 years of Conservative business rates rises, which have seen the multiplier increase by a third since 2010, harming the viability of many high street stores across the country.”
