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Rpi Vs Cpi Inflation - Future Trends


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CPI (cost of living very concentrated on consumable) has lagged RPI (cost of living including housing costs) for quite a long time AFAIK

could the tables be turned - could CPI go ahead of RPI over the coming decades?

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In the budget, if I recall, wasn't there changes to how some benefits/pension were raised annually? A change to cpi form rpi?

If you suggest correctly then that would be (another) own goal


CPI is a geometric mean, while RPI is an arithmetic mean. For those I haven’t already lost, the full reference is here in para 9.4.1.

But what we can all grasp is this:

The CPI annual rate would typically have been about 0.5 percentage points higher if the elementary aggregates had been calculated using arithmetic means as in the RPI.

In other words CPI would be 1/2 per cent lower than RPI, even if all other things were equal.

from http://www.touchstoneblog.org.uk/2010/06/cpi-rpi-and-public-sector-pensions/

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