What is the difference between the RPI and CPI rate of inflation

Both the Consumer Price Index (CPI) and Retail Price Index (RPI) are ways of measuring inflation which is the average change in price of a basket of goods. The RPI, however, includes the costs of housing such as mortgage mortgage repayments, rent and council tax, which take up a large proportion of someone’s income. The CPI on the other hand does not include these goods and as a result is generally around 1% lower than the RPI. Both have their own merits but CPI is generally considered to be more accurate and is used internationally so it is more useful for comparisons.

UD
Answered by Ujjaval D. Economics tutor

3488 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

How are interest rates used by the Monetary Policy Committee to control inflation?


Explain how petrol and diesel cars may be a source of market failure?


What is a Pigouvian Tax?


Examine measures the government might use to restrict the monopsony power of supermarkets.


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences