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Inflation Rate.

Community Veteran
Posts: 8,297
Thanks: 814
Fixes: 9
Registered: 02-08-2007

Inflation Rate.

I am sure the recent figures for the rate of inflation are correct but who decides on what these figures are based ?

Anyone paying council tax will confirm that is not one of the things it is based on, the average rate of inflation during the past 8 years well exceeds the percentage rise (1%) that many workers are getting each year and I guess some do not even get that.

Perhaps the things choosen to reflect the inflation rate need to be reviewed as I do not believe they truly represent the real rate of inflation.

2 REPLIES
Community Veteran
Posts: 18,601
Thanks: 211
Registered: 12-08-2007

Re: Inflation Rate.

The items in the 'shopping basket' that is used to calculate inflation is regularly reviewed.

 

An explanation of the calculation here:

 

Inflation Calculation

shopping Basket

 

'

Jonpe
All Star
Posts: 1,578
Thanks: 420
Fixes: 3
Registered: 05-09-2016

Re: Inflation Rate.

Yes, video cassettes, fax machines, and music cassette tapes are just a few of the items removed from the index in recent years.

There are a number of measures of inflation, CPI (Consumer Price Index) is the one reported on the news every month.  RPI (Retail Price Index) and its cousin 'the underlying rate' used to be the ones we heard most about.  Governments, as you would expect, prefer the one that gives the lowest inflation figure so changed from reporting RPI to CPI some years ago claiming it to be because that's the measure other countries use.  There was a brief spell a few years ago when RPI was lower (negative in fact) than CPI.

RPI is no longer a national statistic but is calculated every month since many pension increases are based on it.

I remember a couple of years ago the dip in inflation was reported to be because cameras had got cheaper.  I'm currently on my sixth, and probably last camera, so that didn't help me much; nor did it help those struggling to feed their children and pay their fuel bills!