The Office for National Statistics collects a large number of prices every month to produce the retail prices index (RPI). Some perceive that consumer inflation is higher than the official measure. This article looks at the variations in price change for goods and services and the relative proportions consumers spend on them and suggests why some people think inflation is higher. Households with different levels of income have different spending patterns, and these spending patterns affect each household’s experience of inflation. For example, households with the lowest level of income spend a greater proportion on food whereas households with higher income spend more on petrol.
Published in web format: 15 September 2008 at 9:30 am
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