Definition
- CPI and RPI
- The CPI and RPI are price indices that track the cost of a basket of goods and services bought by households; the yearly change in an index is the inflation rate.
Example
Can you think of an example of CPI and RPI?
A basket costing £100 last year costs £104 now: inflation of 4 per cent. The RPI also counts mortgage interest and council tax, which the CPI leaves out.
Test yourself
Can you name the six indicators most often used to judge how the UK economy is doing?