Northern Ireland diverges from UK rate

The differences are largely explained by differences in home heating between NI and the rest of the UK.

Getty Images Top view of young women managing home finances using smartphone. She works with household bills and calculates household expenses. — The differences are largely explained by differences in home heating between NI and the rest of the UK.

Empirical data shows that the inflation rate in Northern Ireland is significantly below the UK average for most of 2023.

Figures from the Office for National Statistics (ONS) show that in March 2023 the rate was 10.1% in England and 6.9% in Northern Ireland.

The situation has reversed since October, with the Northern Ireland rate trending above the UK average.

This is largely explained by differences in home heating between Northern Ireland and the rest of the UK.

Most households in Northern Ireland use oil to heat their homes, while other parts of the UK mostly use gas.

The prices of these fuels have changed at different rates in different time periods.

Most NI households use oil for home heating, while other parts of the UK mostly use gas

Getty Images An oil delivery driver fills a residential oil tank. Mains gas is not connected. The man wears protective overalls and gloves as he carefully fills the green plastic tank with household heating oil in preparation for the winter months. To control the amount being delivered, he squeezes a metal nozzle connected to a long rubber hose passing through the oil delivery truck he parks nearby. — Most NI households use oil for home heating, while other parts of the UK mostly use gas

The ONS said: “While gas experienced very high inflation in the first six months of 2023, heating oil inflation rates were not as high.

“Heating oil also experienced negative inflation in early 2023 compared to gas.

“Since October 2023, the opposite effect has been taking place, with both gas and heating oil experiencing negative inflation, but gas is of a greater magnitude.

“Gas and other fuels have had a stronger downward impact on annual inflation in the UK since October 2023 than that experienced by Northern Ireland.”

July 2024, the most recent month of comparable data, shows UK inflation at 2.2% and the NI rate at 3.3%.

The ONS calculates the rate by tracking a “basket” of goods and services representing spending in the UK

Getty Images A man stands in the aisle of a grocery store. The background is out of focus but the food is displayed on shelves. The man is holding a basket containing some items. — The ONS calculates the rate by tracking a “basket” of goods and services representing spending in the UK

Cumulatively, inflation in Northern Ireland between January 2022 and July 2024 was slightly higher at 17% compared to 16.5% in the UK.

Inflation is an increase in the price of something over time.

The ONS calculates the rate by tracking a “basket” of goods and services representing spending in the UK.

Items in the basket are weighted to reflect the amount the household spends on each good or service compared to its total consumption.

For example, a 10% increase in the price of rice will not have the same impact on the general inflation rate as a 10% increase in the price of fuel.

Similarly, home heating oil has more weight in Northern Ireland than in other parts of the UK.

The ONS is running an experiment to try to improve the accuracy of consumer price inflation forecasts for Northern Ireland.

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