RPI
The Retail Price Index (RPI) measures inflation similar to CPI but includes housing costs such as mortgage interest payments. RPI is typically higher than CPI because mortgage costs increase significantly during high interest rate periods. RPI was historically the main UK inflation measure but is now used less officially.
Real World
In 2023, UK RPI reached 13.4% while CPI was 10.1% — the gap widened because the Bank of England raised interest rates to 5.25%, pushing up mortgage costs captured only by RPI.
Exam Focus
When comparing CPI and RPI, always state the specific item included or excluded (mortgage interest payments) to access full marks.
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