RPI, CPI and RPIX are three different measures for calculating inflation. To summarise CPI = headline rate (excludes mortgage interest payments, housing costs) RPI = Retail Price Index. Includes mortgage payments. Source: ONS In 2009, the UK saw a cut in interest rates, and therefore, a fall in mortgage repayments. This caused RPI to become …
The market supply curve shows the combined quantity supplied of goods at different prices. The market supply curve is the horizontal sum of all individual supply curves. Linear Supply curve A linear supply curve can be plotted using a simple equation P = a + bS a = plots the starting point of the supply …
Income deciles show the average income for different income groups in society. A decile splits the population (by households) into 10 equal parts. Assuming there are 26 million households in the UK (2013/14) The bottom decile is the 2.6 million households with lowest income. The 2nd decile is the 2.6 million households in the next …
In the UK, there are quite a few different measures of inflation. All measures seek to show the annual change in living costs. However, different measures of inflation give different inflation figures. For example, RPI can often give a higher rate of inflation than CPI. CPI can also be misleading. For example, an increase in VAT …
For those who like to keep track of the myriad different rates of inflation, the ONS will shortly be publishing a new measure – RPIJ. RPIJ will be basically RPI, but calculated in the same way as CPI which uses a geometric mean. CPI = official household inflation measure (CPI) – calculated using a geometric …
Some of the supply side policies used in the UK during the 1980s and 1990s. 1. Privatisation. There has been an extensive privatisation campaign, most of the major utilities such as Gas , Water and Electricity were sold by the government and floated on the stock market. In some industries like telecommunications it has led …
For the past several months, the governor of the Bank of England has had to write a letter to the Chancellor explaining why UK inflation has been above the government’s target of 1-3%. April 2012 gives the first on target inflation figure (1-3%) since Dec 2009. Core inflation which strips out energy and food has …
Readers Question: Can you please elaborate on “fiscal devaluation” as a suggested solution for Euro area competitiveness problems? Fiscal devaluation is an attempt to restore competitiveness through changes to the tax system. In an exchange rate devaluation, a country allows its currency to fall in value. This makes the countries exports cheaper and more competitive; …