What is the Retail Price Index?

The Retail Price Index is compiled each month by the Office for National Statistics and is closely monitored by investors. It is one of the main measures of inflation used in the UK. This index is produced by combining about 180,000 price quotes for over 650 representative items that constitute a fixed basket of goods over a period of time and tracking the changes in the cost of the items.

Where have you heard about the Retail Price Index?

Inflation is important to investors since it has the potential to eat into investment returns. In the wider economy, a sudden rise in inflation is likely to make the news since it means consumers and businesses will have to contend with higher costs.

What you need to know about the Retail Price Index.

The index tracks changes in the cost of living, by following the prices of commonly used goods and services. Food, energy and household bills are among the costs it reviews. In contrast to the Consumer Price Index, it also includes certain costs relating to housing.

Inflation rates can have a significant impact on the country's economy. For example, they can influence the Bank of England's interest rate decisions. The British Government also uses the Retail Price Index when setting the values of things like bonds.

Find out more about the Retail Price Index.

The Retail Price Index is only one measure of inflation in the UK. For further information, see Consumer Price Index.