What is the Consumer Prices Index? CPI explained
The Consumer Prices Index (CPI) is a measure of the average change in the prices of a basket of goods and services consumed by households. It is used as a measure of inflation, as well as a tool for indexing the value of money over time. The CPI is calculated by the Office for National Statistics (ONS) in the United Kingdom, and is based on a basket of goods and services that is representative of the consumption patterns of the average household. The basket is updated periodically to ensure that it remains representative of current consumption patterns. The price of each item in the basket is measured at regular intervals, and the CPI is calculated as the percentage change in the overall price of the basket between two periods. For example, if the CPI was 100 in January and 110 in December, this would indicate that the average price of the basket of goods and services had increased by 10% over the course of the year. The CPI is often used as a measure of inflation, as it reflects the c...