the Business Forum and
the Economic Partnership
in Brighton & Hove
Homepage    BCRP Intranet    Funding    Events    Knowledgebase    Links    About us     Contact us
Key projects
Crime
reduction
 


Inward
investment
information
 


Licensee
Forum
 

Workforce development 

Transport
 

Business &
climate
change

Property &
Development sites

Business
Improvement
Districts

Housing
 

Strategy
 

Consultation opportunities
 

Brighton & Hove Business Forum
8-11 Pavilion Buildings, Brighton, BN1 1EE
Tel: 01273 735442
Email: info@brighton
business.co.uk

© Brighton & Hove
Business Forum

News - 20 January 2007

So is inflation 3% or 4.4%?

It all depends on which index you use to measure it – the Consumer Prices Index (CPI) or the Retail Prices Index (RPI). So why do we have two indexes anyway?

According to the RPI inflation jumped from 3.9% in November to 4.4% in December 2006, the highest rate for 15 years and double the rate in December 2005.

According to the CPI inflation increased from 2.7% in November to 3% in December 2006, the highest rate for 10 years.

The Bank of England uses the CPI to measure inflation and it is this figure that triggers the need for an open letter from the Governor to the Chancellor if it goes above 3%. The target for the Bank is to keep inflation, at or as close to, 2%.

The RPI has a history going back to 1906 and it includes changes in the cost of a basket of common items but also mortgage interest payments and council tax and, possibly because it is used to negotiate pay settlements, it is the measure more familiar to the general public.

In the 1950s inflation according to the RPI measure averaged 4.3% and it declined to an average 3.5% in the 1960s before zooming up to 12.6% in the 1970s and dropping to an average 5.1% in the 1990s most of which was caused by high rates of inflation between 1990 and 1993.

Since 1993 inflation according to RPI has been an average of 2.6%

The CPI is an index that was devised to be compatible across Europe and excludes owner occupied housing costs. It should, in theory, include housing expenses but EU statisticians are still trying to work out how to do this. Average CPI across the EU is currently 1.9%.

Roughly speaking in the UK the Bank of England’s CPI target of 2% translates to an RPI target of 2.75%. In an added twist the Office for National Statistics has introduced a novel personal inflation calculator which allows individuals to assess their own rate of inflation which is directly reflected in their lifestyles and circumstances.


Read related items on:
Inflation
Bank of England
Office of National Statisitics


Browse our business Knowledgebase or search by keyword


Headlines

15 December 2017
Brighton is among the best places to start a business due to their strong growth factors
15 December 2017
GTR consultation ends 20th Dec 2017 13 December 2017
Ethical Food StartUp Programme - Idea Generation Workshop 12 December 2017
Utilise Plus launch programme of energy efficiency grants and business support for SMEs 11 December 2017
City Centre Vacancy Rates Drop Slightly From Sept 5 December 2017
Innovate UK Announces Sector Competitions in Manufacturing and Infrastructure Systems 5 December 2017
GDPR, steps to early compliance 1 December 2017
The 29th Sussex Business Awards 2017 Winners Announced 1 December 2017
Old tech gear? Give IT a new lease of life 29 November 2017
Driving for Better Business Campaign launches 29 November 2017
ARKA Funerals sponsor Burning the Clocks 2017 with 'In Memory' lanterns 27 November 2017
Govia Thameslink launches third consultation phase on once-in-a-generation timetable restructure 23 November 2017
Coast to Capital Launches Brighton Mainline Alliance 22 November 2017
Calling all UK companies that have transport, parking and commuting issues to address 15 November 2017
Start-up Challenge Business Competition Offering £10,000 Investment to Young Entrepreneurs 15 November 2017
IUK Announces £10 Million Innovation Loans Infrastructure Systems Funding Competition for UK SMEs 15 November 2017
Sussex Food and Drink Grand Finalists Celebrate Success 10 November 2017
Meaning conference confirms speaker line-up: breeding a new army of business activists 10 November 2017
Positive body image documentary screening at Hove school 8 November 2017
Material Practices: Painting and Printmaking at the University of Brighton - Private View 8 November 2017
Economic Partnership kick starts city strategy consultation 8 November 2017
GTR respond to positive ASLEF referendum result 7 November 2017
350th employer signed up to the Brighton & Hove Campaign 7 November 2017
Rampion announces £4 million community fund 6 November 2017
The First Gamification Conference comes to Brighton 3 November 2017
Shoreham Port Welcomes New Commercial and Operations Director 2 November 2017
Burning the Clocks launches Crowdfunder for 2017 2 November 2017
The Gatwick Diamond Business Awards are now open for Entries 31 October 2017
Brighton Based Paxton Open New Centre for Technology & Innovation 27 October 2017
Adventures in risk taking for high growth businesses 27 October 2017
Can your business benefit from offering a 'world of work' experience? 27 October 2017
The Small Business Saturday Bus Tour launches across the UK for its fifth year 24 October 2017
Business Networking & Case Study Visit with the Sustainable Business Partnership 24 October 2017
Could you use an Energy Saving Workshop? 17 October 2017
Peter Blake raffle raises £2,290 for Middle Street School 17 October 2017
AMEX named major sponsor of city's bike share scheme 16 October 2017
Ropetackle Business Friends scheme 4 October 2017
VIRGIN STARTUP MEETUP 'HOW TO TELL (SELL) YOUR STORY' 3 October 2017
BTN BikeShare: a successful first month 3 October 2017
PLATF9RM open at Hove Town Hall