Can you explain the difference between RPI and CPI inflation?

Retail Price Index and Consumer Price Index are both indices that seek to measure the current level of inflation, that is the general rise in price levels across goods over the year. CPI is calculated using a 'basket of goods' that reflects what consumers would tend to buy (note, this may change over time with trends). This basket is then averaged to approximate the price level, and compared to previous data. The main difference with RPI inflation is that RPI incorporates the cost of living in its inflation level. This could be rent, or mortgage repayments. For this reason, RPI inflation tends to be higher than that of CPI.

MH
Answered by Matthew H. Economics tutor

17195 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

If timber prices fall by 30%, what will be the expected % change in demand for timber in the economy if the Price Elasticity of Demand is -0.5, and explain the effect on revenue for a timber-selling firm.


Explain the difference between short term growth and long term growth


Explain fiscal policy and how it can be used


Explain two causes of inflation using AD/AS analysis.


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning