25 Jul 2019

The Inflation Basket

Inflation: the annual rise in the cost of goods and services, is measured by various indices and the goods and services in those indices change each year - so what's 'In' and what's 'Out' this year

Inflation: the annual rise in the cost of goods and services, is measured by various indices.

The Retail Prices Index (RPI) is always quoted, yet rarely used for much nowadays, having been replaced by the Consumer Prices Index (CPI), which is of a typically lower rate than RPI, and is what is used for the basic state pensions triple lock guarantee.

However, the lesser quoted, Consumer Prices Index Housing (CPIH) is the official headline measure of inflation in the UK. It contains a ‘basket’ of goods and also includes owner occupiers housing costs.

Each year, the basket of goods inside the CPIH change, and here are some items which have gone ‘in’ this year, and some which have gone ‘out’:

IN

• Electric Toothbrush
• Bluetooth Speaker
• Dog treats
• Popcorn
• Hats

OUT

• Envelopes
• Crockery Set
• Unit Trust Initial Charges
• Hi-Fi
• Cola flavoured drink