239:, mortgage interest payments, house depreciation, buildings insurance, ground rent, solar PV feed in tariffs and other house purchase cost such as estate agents' and conveyancing fees. A further index, CPIH, has been published which includes housing costs but CPIH does not meet current international standards. The Office for National Statistics states that:
176:
155:
be published. Subsequently ONS decided to no longer classify RPI as a "national statistic". However, ONS will continue to calculate RPI, among several versions of the inflation index, in order to provide a consistent historic inflation time series. The index factors continue to be used to adjust for
166:
In
November 2021, inflation has risen faster than projected to its highest level in nearly a decade, putting pressure on the Bank of England to increase interest rates. According to data from the ONS, the annual rate of the CPI increased to 4.2 percent in October, up from 3.1 percent in September.
108:
The highest annual inflation since the introduction of the RPI came in June 1975, with an increase in retail prices of 26.9% from a year earlier. By 1978, this had fallen to less than 10%, but it rose again towards 20% over the following two years before falling again. By 1982, it had fallen below
146:
in certain subcomponents, the RPI is biased upwards compared to other indices by a "formula effect" of roughly one percentage point. CPAC concluded that "the use of the Carli formula is no longer appropriate" due to the weak axiomatic properties of the Carli method. (The weak property is the fact
116:
From March to
October 2009, the change in RPI measured over a 12-month period was negative, indicating an overall annual reduction in prices, for the first time since 1960. The change in RPI in the 12 months ending in April 2009, at −1.2%, was the lowest since the index started in 1948.
243:
The
Consumer Prices Index including owner occupiers' housing costs (CPIH) is the most comprehensive measure of inflation. It extends the Consumer Prices Index (CPI) to include a measure of the costs associated with owning, maintaining and living in one's own home, known as owner
134:
In
February 2011, annual RPI inflation jumped to 5.1% putting pressure on the Bank of England to raise interest rates despite disappointing projected GDP growth of only 1.6% in 2011. The September 2011 figure of 5.6%, the highest for 20 years, was described by the
192:
770:
104:
nor, from April 2011, as the basis for the indexation of pensions of former public sector employees. As of 2016, the UK state pension is indexed by the highest of the increase in average earnings, CPI or 2.5% ("the triple lock").
418:
84:
RPI was first introduced in 1956, replacing the previous
Interim Index of Retail Prices that had been in use since June 1947. It was once the principal official measure of inflation. It has been superseded in that regard by the
150:
In 2013, following a consultation on options for improving the RPI, the
National Statistician concluded that the formula used to produce the RPI does not meet international standards and recommended that a new index known as
645:
The
Spending Review and Autumn Statement confirms that the basic State Pension will once again be increased by the triple lock to £119.30 a week from April 2016 and sets the rate of the new single tier pension at £155.65 a
581:
167:
Inflation surpassed the Bank of
England's target of 2% and was higher than the 3.9 percent predicted by experts. Higher rates for transportation, restaurants, and hotels mainly contributed to the price increase in October.
632:
759:
902:
96:, and social housing rent increases. Many employers also use it as a starting point in wage negotiation. Since 2003, it is no longer used by the government for the inflation target for the
736:
258:
The variability of the change in RPI, due to fluctuations in mortgage interest rates, is shown in the graph on the right. This was one of the arguments used in favour of changing to RPIX.
414:
213:
A set of weights are calculated, showing the relative importance of the items in the average family budget – the greater the share of the average household bill, the greater the weight.
542:
68:
As the RPI was held not to meet international statistical standards, since 2013, the Office for
National Statistics no longer classifies it as a "national statistic", emphasising the
571:
248:
CPI is usually lower, though this is due more to the differences in the calculation formulas for the indices than to the differences in coverage. The UK Government announced in the
232:
In practice the comparison is made over shorter periods, and the weights are frequently reassessed. Detailed information is published on the Office for
National Statistics website.
936:
714:
624:
826:
803:
278:) and local authority taxes as well as mortgage interest payments, and the RPIJ which uses the Jevons (geometric) rather than the Carli (arithmetic) method of averaging.
255:
Regarding state pensions, the UK government confirmed in their autumn statement in 2011 that these would go up by the greater of the CPI, average earnings, or 2.5%.
374:
957:
558:
In accordance with the Bank of England Act (1998), the Chancellor has decided to change the inflation target, from today, to the CPI measure of inflation.
101:
229:
The unweighted Carli method overstates inflation rates. However as stated above, the RPI calculation employs weights, which remove this overstatement.
322:
216:
The price of each item is multiplied by the weight given to the item, so that the contribution of the item's price is in proportion to its importance.
1032:
990:
889:
156:
inflation in the calculation of chargeable (capital) gains for inclusion in the tax computation for entities subject to corporation tax in the UK.
1022:
728:
1017:
682:
531:
180:
142:
After a thorough review, in 2012 the National Statistician's Consumer Prices Advisory Committee (CPAC) determined that due to the use of the
86:
69:
92:
The RPI is still used by the government as a base for various purposes, such as the amounts payable on index-linked securities, including
859:
226:
The RPI calculation employs a variation of the Carli method rather than the Jevons method employed in the calculation of RPIJ and CPI.
476:
The Consumer Prices Index (CPI) measure dropped to 4.5% from 5.2% in September. ... Retail Prices Index (RPI)... fell from 5% to 4.2%
926:
346:
706:
490:
825:
Wearden, Graeme; Ambrose, Jillian; Osborne, Hilary; Partington, Richard; Partridge, Joanna; Partridge, Joanna (17 November 2021).
147:
that after a price bounce and a subsequent full return to original prices, the Carli method shows positive aggregate inflation.).
795:
666:
109:
10% and a year later was down to 4%, remaining low for several years until approaching double figures again by 1990. Aided by a
442:
249:
932:
898:
766:
514:
463:
123:
lobbied the government to allow them to freeze rents at current levels rather than reduce them in line with the RPI, but the
47:
610:
195:
The annual rate of change of the three indexes shows the volatility of the RPI measure, which is one of its disadvantages
366:
207:
152:
143:
1027:
314:
203:
A base year or starting point is chosen. This becomes the standard against which price changes are measured.
827:"UK's decade-high inflation makes December rate rise 'more likely'; gas prices climb again – business live"
1012:
184:
996:
110:
93:
51:
965:
235:
The RPI includes an element of housing costs, whereas the following items are not included in the CPI:
287:
679:
760:"CPAC(12)24 – The formula effect gap between the Retail Prices Index and the Consumer Prices Index"
120:
62:
252:
that CPI would be used in place of RPI for uprating of some benefits with effect from April 2011.
113:
in the early 1990s, increased interest rates brought inflation down again to an even lower level.
219:
The price of each item must be found in both the base year and the year of comparison (or month).
361:
359:
834:
127:
concluded that rents should follow RPI down as far as −2% per annum, leading to savings in
686:
576:
538:
518:
446:
128:
97:
495:
415:"History of and differences between the Consumer Prices Index and Retail Prices Index"
1006:
658:
271:
439:
206:
A list of items bought by an average family is drawn up. This is facilitated by the
17:
511:
459:
223:
This enables the percentage change to be calculated over the desired time period.
191:
606:
179:
3 inflation indexes compared, based on 1988 as 100: Retail Price Index, RPIX and
628:
293:
236:
160:
124:
73:
396:
58:
838:
758:
National Statistician's Consumer Prices Advisory Committee (September 2012).
572:"Public pensions: switch from RPI to CPI declared 'lawful' by the High Court"
76:
still uses the RPI measure of inflation for various index-linked tax rises.
43:
175:
163:, Governor of the Bank of England, said that RPI should be abandoned.
315:"Finance Bill — Rates of duty, etc.: reference to Retail Price Index"
55:
680:
Threat of deflation as retail price index falls to lowest-ever level
190:
174:
884:
882:
880:
367:"National Statistician announces outcome of consultation on RPI"
267:
860:"Consumer price inflation, UK - Office for National Statistics"
275:
532:"The new inflation target and the monetary policy framework"
274:
interest payments, the RPIY, which excludes indirect taxes (
796:"Mark Carney calls for 'meritless' RPI measure to be axed"
601:
599:
347:
RPI no longer an official national statistic – UKSA
701:
699:
199:The United Kingdom RPI is constructed as follows:
729:"Inflation is disastrous for our economic future"
342:
340:
507:
505:
958:"Budget June 2010 – benefits and tax credits"
8:
964:. UK Government. 3 May 2011. Archived from
625:"Spending review and autumn statement 2015"
607:"Autumn Statement 2011 – pension increases"
486:
484:
397:"Pub industry in plea over Budget tax rise"
50:. It measures the change in the cost of a
417:. Office for National Statistics. 2011.
306:
296:(more detailed statistical explanation)
993:, Office for National Statistics, 2013
928:UK consumer price inflation: June 2017
421:from the original on 24 September 2015
991:Consumer Price Indices: A brief guide
891:Consumer Price Indices, A brief guide
717:from the original on 1 December 2011.
669:from the original on 20 January 2008.
584:from the original on 26 February 2016
466:from the original on 28 November 2008
377:from the original on 27 December 2015
7:
908:from the original on 10 January 2015
806:from the original on 1 February 2018
773:from the original on 2 February 2013
739:from the original on 19 October 2011
613:from the original on 16 August 2012.
939:from the original on 9 January 2018
325:from the original on 21 August 2017
27:United Kingdom measure of inflation
570:Evans, Richard (2 December 2011).
460:"Consumer inflation falls to 4.5%"
449:. 2008-10-14. Retrieved 2008-10-22
266:Variations on the RPI include the
72:instead. However, as of 2018, the
25:
635:from the original on 9 March 2016
548:from the original on 8 March 2016
814:– via www.telegraph.co.uk.
512:Inflation measure turns negative
1033:Inflation in the United Kingdom
491:Landlords lose rent cuts battle
1023:Office for National Statistics
933:Office for National Statistics
899:Office for National Statistics
767:Office for National Statistics
462:. BBC News. 18 November 2008.
48:Office for National Statistics
1:
1018:Economy of the United Kingdom
659:"Thatcher years in graphics"
270:, which removes the cost of
208:Living Costs and Food Survey
794:Wallace, Tim (8 May 2018).
735:. London. 18 October 2011.
30:In the United Kingdom, the
1049:
440:National Statistics Online
999:topic page at ONS website
707:"Output, prices and jobs"
521:, BBC News, 21 April 2009
102:Monetary Policy Committee
46:published monthly by the
246:
196:
188:
185:Average Earnings Index
517:24 April 2009 at the
241:
194:
178:
139:as "shockingly bad".
52:representative sample
665:. 18 November 2005.
631:. 25 November 2015.
541:. 10 December 2003.
445:3 March 2009 at the
288:Consumer price index
121:Housing associations
87:Consumer Price Index
70:Consumer Price Index
997:Retail Prices Index
685:1 June 2010 at the
373:. 10 January 2013.
32:Retail Prices Index
18:Retail Prices Index
1028:1947 introductions
968:on 15 October 2012
609:. 12 August 2012.
403:. 12 October 2018.
349:, John Greenwood,
197:
189:
94:index-linked gilts
42:) is a measure of
36:Retail Price Index
713:. 24 March 2011.
290:(general concept)
159:In January 2018,
16:(Redirected from
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321:. 18 July 2000.
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250:June 2010 budget
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137:Daily Telegraph
129:housing benefit
98:Bank of England
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985:External links
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499:, 10 July 2009
496:Inside Housing
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371:www.ons.gov.uk
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351:MoneyMarketing
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144:Carli formula
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970:. Retrieved
966:the original
961:
952:
941:, retrieved
927:
921:
910:, retrieved
890:
867:. Retrieved
863:
854:
842:. Retrieved
831:The Guardian
830:
820:
808:. Retrieved
799:
789:
782:
775:. Retrieved
753:
741:. Retrieved
732:
723:
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690:
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662:
653:
644:
637:. Retrieved
619:
586:. Retrieved
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557:
550:. Retrieved
526:
494:
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468:. Retrieved
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423:. Retrieved
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379:. Retrieved
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327:. Retrieved
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31:
29:
869:17 November
844:17 November
629:HM Treasury
470:29 November
294:Price index
244:occupiers'.
237:Council tax
171:Calculation
161:Mark Carney
74:UK Treasury
1007:Categories
972:25 October
912:10 January
743:20 October
425:16 January
301:References
262:Variations
962:DirectGov
943:8 January
839:0261-3077
691:The Times
183:with the
111:recession
44:inflation
937:archived
903:archived
804:Archived
777:14 April
771:Archived
737:Archived
715:Archived
683:Archived
667:Archived
663:BBC News
633:Archived
611:Archived
582:Archived
543:Archived
515:Archived
464:Archived
443:Archived
419:Archived
401:BBC News
375:Archived
323:Archived
282:See also
272:mortgage
125:Treasury
63:services
639:8 March
588:8 March
552:8 March
89:(CPI).
80:History
837:
56:retail
906:(PDF)
895:(PDF)
810:8 May
763:(zip)
546:(PDF)
535:(PDF)
381:8 May
329:8 May
59:goods
974:2011
945:2018
914:2015
871:2021
846:2021
835:ISSN
812:2018
779:2015
745:2011
646:week
641:2016
590:2016
554:2016
472:2008
427:2015
383:2018
331:2018
268:RPIX
153:RPIJ
61:and
276:VAT
181:CPI
100:'s
54:of
40:RPI
34:or
1009::
960:.
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339:^
317:.
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38:(
20:)
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.
