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What is the Consumer Price Index?
The Consumer Price Index (CPI) is normally represented by a basket of goods or products. It measures the average change in the price of this basket of goods over a defined period of time. The Consumer Price Index often taken as a measurement for the inflation rate.
How is the Consumer Price Index calculated?
The CPI basket is made up of all types of goods and services consumed by the general UK population. These categories will include goods such as food and drink, household items, clothing, transportation, medical care, recreation, education and communications, and other items. The index is calculated by taking the price of the basket in one year and dividing it by the price of the basket in another year. This ratio is then multiplied by 100 with the base year always being set at 100.
Our chart shows the Consumer Price Index (CPI) in the United Kingdom (UK) from 2000 to date. The base year is 2015.