One of two consumer price indices used as the domestic measure of inflation in the UK (see also Retail Prices Index (RPI) (www.practicallaw.com/5-377-4351)). The CPI is published by the Office for National Statistics. It measures the average change from month to month in the prices of goods and services purchased by most households in the UK. The government uses the CPI as the basis for its inflation target.
The CPI uses the same basic price data as the RPI, but there are some differences. For example, the CPI:
Does not include council tax and a number of housing costs but it does include charges for financial services which are not included in the RPI.
Covers a broader population than the RPI.
Adopts different mathematical formulae to calculate price changes.
Has different classifications for goods and services.
For further information, see the Office for National Statistics website (www.practicallaw.com/6-202-3676).