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Release: International Comparison of the Formula Effect Between the CPI and RPI, 2012

Released: 20 March 2012


Bethan Evans

Prices Development and OOH

Telephone: +44 (0)1633 456122

Categories: Economy, Prices, Output and Productivity, Price Indices and Inflation, Consumer Price Indices, Consumer Prices Index, Retail Prices Index

Frequency of release: Annually

Language: English

Geographical coverage: UK

Geographical breakdown: UK and GB

In this release

There are a number of differences between the Consumer Prices Index (CPI) and Retail Prices Index (RPI), including their coverage, population base, commodity measurement and methods of construction. Combined, these differences have meant that, for most of its history, the CPI has been lower than the RPI.

One of the main reasons to this difference is the method of construction at the lowest level, where different formulae are used in the CPI and RPI to combine individual prices. This difference is usually referred to as the formula effect.

This article will investigate similar formula effects present in the inflation measures of other countries, and where necessary will attempt to explain why the magnitude of the formula effect experienced by other countries differs from that of the UK.

International comparison of the Formula effect between CPI and RPI, 2012 (152.2 Kb Pdf)

Content from the Office for National Statistics.
© Crown Copyright applies unless otherwise stated.