Retail Price Index (RPI)

The Retail Price Index (RPI) is a measure of the average change in prices of a basket of goods and services purchased by the typical household. It is one of the most widely used measures of inflation in the United Kingdom.

The RPI is calculated by the Office for National Statistics (ONS) and is based on a survey of prices of goods and services purchased by households. The survey covers a wide range of items, including food, clothing, housing, transport, and recreation.

The RPI is a weighted index, which means that the prices of different items are given different weights depending on their importance in the typical household budget. For example, food and housing are given a higher weight than clothing and recreation.

The RPI is published monthly by the ONS. The latest figure, for January 2023, was 7.4%. This means that prices have risen by 7.4% on average since January 2022.

The RPI is used by a number of government departments and agencies to set the level of benefits and other payments. It is also used by businesses to set prices and by investors to make decisions about where to invest their money.

The RPI is a controversial measure of inflation. Some economists argue that it is not a good measure of the cost of living because it does not take into account changes in the quality of goods and services. They also argue that it is biased towards older people, who tend to spend a higher proportion of their income on food and housing.

Despite these criticisms, the RPI remains the most widely used measure of inflation in the United Kingdom.