cpi

The Real Rate of Inflation

The Real Rate of Inflation

In the UK there is a strong mistrust of the government’s inflation figures. People often feel that their cost of living is rising faster than official CPI statistics. CPI inflation is calculated using a comprehensive price survey of 1000 of the most popular goods and services. However, there are a number of reasons why people feel inflation is increasing faster than government statistics. 1. CPI excludes housing costs. The official measure for inflation used to be the RPI. RPI inflation is currently higher than CPI; RPI inflation is closer to 4%. The…