What is the difference between CPI, RPI, and CPIH?
The UK’s three main metrics of inflation (CPI, RPI, and CPIH) all measure how much prices have increased, but they all do this in slightly different ways.
The most important measure of inflation in the UK is the consumer prices index (CPI) as it is an internationally recognised statistic and is used by policymakers to help inform their decisions.
To measure CPI each month, the ONS looks at around 180,000 prices across almost 750 typical goods and services to see how prices have changed. This shopping basket is reviewed each year to ensure the statistic keeps up with people’s evolving spending habits.
The retail prices index (RPI) used to be the UK’s official measure of inflation, and usually tracks a little higher than CPI because it includes costs associated with home ownership and is calculated differently.
Despite CPI now being the official measure, RPI is still relevant today as certain taxes (like tobacco duty, alcohol duty, and others) are influenced by it.
Finally, the consumer prices index including owner occupiers’ housing costs (CPIH) differs from standard CPI as it includes the costs of owning, maintaining and living in a home.
What is inflation?
Inflation is a key economic metric that shows how much prices have increased in a set period of time, usually a year.
For instance, if a box of apples cost £10 in one year, but then cost £11 the next year, we can say that it experienced inflation of 10%.
In the UK, the most important way of measuring inflation is through the consumer prices index (CPI), which is updated every month.
The UK’s target level of inflation, like that of most other comparable economies, is 2%. Economists believe this level is a healthy rate of price growth.
When will September’s inflation data be published?
The Office for National Statistics (ONS) will publish the latest inflation data covering September on 21 October at 7am.
The report will contain the latest data for all the UK’s measurements of inflation, including the consumer prices index (CPI), retail prices index (RPI), and the consumer prices index including owner occupiers’ housing costs (CPIH).
The ONS publishes inflation data every month.
Good afternoon and welcome to MoneyWeek’s live coverage of September’s inflation data.
Stay tuned on this page for the latest analysis and commentary as well as the breaking news as soon as we get it tomorrow morning.
