what is the retail price index rpi 
the retail price index rpi is one of two measures of consumer inflation produced by the united kingdom s office for national statistics ons it measures certain types of cost escalation but is not considered the official inflation statistic in the u k the rpi was introduced in 1947 and implemented in 1956 retail price index rpi and inflationfirst calculated in june 1947 the rpi was the principal measure of inflation in the u k and replaced the previous cost of living index the retail price index rpi was replaced by the consumer prices index cpi as the primary measure of inflation in 2003 to set the inflation target for the bank of england s monetary policy committee in 2013 the office of national statistics reclassified the rpi as not a national statistic but continues to include it with other indexes on its website 1the rate of inflation is the change in prices for goods and services over time using the rpialthough the rpi is not an official statistic it is used to determine 2rpi vs cpithe rpi tracks changes in the cost of a fixed basket of goods over time and it is produced by combining about 180 000 price quotes for around 700 representative items 3 the cpi began in 1996 as the harmonised index of consumer prices hicp this index was developed to unite statistics for measuring all eu economies following the economic and monetary union in 1992 since the cpi was introduced the measurement of 12 month inflation in the u k has generally been higher when measured by the rpi as compared to the cpi the difference arises because the rpi includes several items excluded in the cpi and vice versa secondly the two indicators measure price change for different target populations and both use different formulas leading to a difference known as the formula effect 4