They can affect interest rates, tax allowances, wages, state benefits, pensions, maintenance, contracts and many other payments. The indices are used in many ways by the government, businesses, and society in general. Consumer Price Indices – A brief guide gives an overview of the methodology, and also explains the main features of the suite of indices and their uses.Īs we spend more on some things than others, the components of the index are “ weighted”, which ensures that they reflect the importance of the items in the average shopping basket, and the amounts we spend in different regions of the country and in different types of shops.Ĭonsumer price indices are important indicators of how the UK economy is performing. The price index estimates changes to the total cost of this basket. One way to understand a price index is to think of a very large shopping basket containing the goods and The Retail Prices Index (RPI) and its derivatives have been assessed against the Code of Practice for Official Statistics and found not to meet the required standard for designation as National Statistics the RPI, its sub-components and the RPIX continue to be published as they are tied to long-term contracts.Ĭonsumer price inflation is the rate at which the prices of the goods and services bought by households rise or fall, and is estimated by using consumer price indices. The National Statistics status of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) was reinstated on 31 July 2017 a letter (PDF, 160KB) from the Director General for Regulation to the National Statistician detailed the actions that were taken to meet the requirements as set out in the CPIH assessment report. The CPI continues to be published it is used in the government’s target for inflation and is produced to international standards in line with European regulations. To give an accurate picture of price changes, our consumer price indices are compiled using a large and representative sample of over 700 goods and services, and their price movements are regularly measured in approximately 20,000 outlets within the UK.Īs of 21 March 2017, the Consumer Prices Index including owner occupiers’ housing costs (CPIH) became our lead inflation index it is the most comprehensive measure of inflation as it includes owner occupiers’ housing costs and Council Tax, which are excluded from the CPI. Important points about consumer price inflationĬonsumer price inflation is the rate at which the prices of goods and services bought by households rise and fall it is estimated using consumer price indices.Ī price index can be used to measure inflation in a number of ways the most common is to look at how the index has changed over a year, which is calculated by comparing the price index for the latest month with the same month a year ago.
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