What is the RPI?
The Retail Price Index, or RPI, is a metric that tracks the change in the price of goods and services. It was first conceived in 1947 and was once the official measure of inflation in the UK.
- The highest recorded RPI rate came in June 1975, where it was measured at an increase of 26.9% from the previous year.
What is the RPI Used For?
The RPI figure is used for various purposes:
- Some employers use the figure for wage negotiation
- Social housing rent prices
- Amounts payable on index-linked securities
- Rail fares
- Student loan repayments
Compare UK Savings Rates which Beat Inflation
Problems with the RPI
Since 2013, RPI is no longer considered a ‘national statistic’. This occurred after the formula used to calculate the index was considered to not meet international standards.
It is thought that RPI over-estimates inflation by around one percentage point.
The Office for National Statistics (ONS) has stated that RPI is flawed measure of inflation, and do not recommend it’s use.
RPI vs CPI
The Consumer Price Index (CPI) is considered more accurate formula than RPI.
CPI is what is used by the ONS as one of the current inflation metrics, along with several other indices which also include housing data.
However, RPI is still calculated by ONS as it is still used for many things.
There’s a strong case for anything using RPI to switch to using CPI or other figures instead, and this is currently a hotly debated topic among economists and politicians.
Get the RPI Yearly Data