Measuring Inflation
Monitoring prices to produce various inflation measures
The Office for National Statistics produce a number of measures of inflation covering consumer prices, producer prices and corporate services prices.
Consumer Prices Index (CPI)
The Consumer Prices Index (CPI) has been designed as a macro-economic measure of consumer price inflation and forms the basis for the Government's inflation target that the Bank of England's Monetary Policy Committee is required to achieve. It has been developed according to internationally agreed rules and internationally is known as the HICP. The HICP is the preferred measure for international comparisons of inflation.
Like the RPI, the CPI measures the average change from month to month in the prices of consumer goods and services. However it differs in the particular households it represents, the range of goods and services included, and the way the index is constructed.
Retail Prices Index (RPI)
The Retail Prices Index is the most familiar general purpose domestic measure of inflation in the United Kingdom and is continuously available from June 1947. It measures the average change from month to month in the prices of goods and services purchased by most households in the United Kingdom. The RPI or its derivatives are used by the Government for the uprating of pensions and benefits and index-linked gilts.
Harmonised Index of Consumer Prices (HICP)
In the UK this measure is known as the CPI (see above). Eurostat continue to publish this measure as the UK HICP. The HICP was launched in 1997 in response to the need for a Europe wide comparable measure of inflation (as required by the Maastricht Treaty). The HICP measures inflation, each month, in the European Monetary area as a whole and individually measures and compares each Member State.
Producer Price Index (PPI)
The Producer Price Index is a monthly survey that measures the price changes of goods bought and sold by UK manufacturers. The output price index - sometimes referred to as factory gate prices - measures prices of goods sold by UK manufacturers. The Input index measures the prices of materials and fuel purchased by manufacturers. In addition there are a number of export and import price indices available.
Services Producer Price Index (SPPI)
The Services Producer Price Index is a quarterly survey of prices charged for services provided by UK businesses to other UK businesses and government. Industry-specific series covering about half the total corporate services sector are currently published as experimental statistics. The 'experimental' status means the indices are still under development and may be subject to revision. Price indices for industries not yet covered, eg computer services, are under development and are being added progressively to the published series.
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Guide to Finding RPI Data