retail price index

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Related to retail price index: consumer price index

Retail Price Index

A measure of inflation that considers what people spend on staple goods and services. It is calculated by taking the average of changes in price to a basket of goods and services compiled by the appropriate government agency. The goods and services in the basket are weighted according to their perceived importance. The RPI was considered a primary tool in determining how people are experiencing inflation, but it has largely been superseded by the Consumer Price Index. It is primarily used today in the British news media.
Retail price indexclick for a larger image
Fig. 169 Retail price index. Composition of the RPI. Source: Office for National Statistics.

retail price index (RPI)

a weighted average of the PRICES of a general ‘basket’ of goods and services bought by final consumers. Each item in the index is weighted according to its relative importance in total consumers’ expenditure (see Fig 169 ). Starting from a selected BASE YEAR (index value = 100), price changes are then reflected in changes in the index value over time. Thus, taking the example of the UK's ‘all items’ Retail Price Index (RPI), the current RPI base year is 1987 = 100, in February 2005 the index value stood at 189, indicating that retail prices, on average, had risen 89% between the two dates.

A retail price index is commonly used to measure the rate of INFLATION and as a GNP DEFLATOR. In the UK, the ‘all items’ RPI was formerly used to measure the ‘headline’ inflation rate, while the RPIX index, which excludes mortgage interest payments, measured the ‘underlying’ inflation rate. In December 2003, the RPI was replaced by the CONSUMER PRICE INDEX (CPI) as the government's ‘official’ meaure of inflation, thus bringing it into line with European Union practice. See HARMONIZED CONSUMER PRICE INFLATION RATE. See Fig 93 (a) , main INFLATION entry, for statistics on inflation rates in recent years.

References in periodicals archive ?
Merseytravel chief executive Neil Scales said: ``The new operator has agreed not to raise fares overall more than the retail price index for the next 25 years, a feature unique to Merseyrail.
The index is different from the official UK inflation figures known as the retail price index because they do not include the costs of many public and private services such as council tax and costs to the health service.
We have carefully considered the current economic conditions, the pressures the business faces, the UK's Retail Price Index (RPI), and concluded that it is the right thing to do.
The Government's preferred barometer, the retail price index, which includes mortgages, was unchanged at 2.
The rate of inflation, measured by the retail price index, dipped after banks and building societies followed the 0.
Train companies base their annual fare increases for regulated fares (which include annual season tickets) on the retail price index (RPI) for July plus 1%.
The Bank of England is to say goodbye to the Retail Price Index and use a European inflation target.
The Consumer Price Index (CPI), which excludes housing costs, was being sidelined in favour of the Retail Price Index (RPI), according to pay analysts Incomes Data Services.
The research, commissioned by BT Internet, was based on a range of sources including the Retail Price Index published by the Office for National Statistics and the Labour Force Survey.
1 percentage points in the headline Retail Price Index (RPI) to 2.
He then gets a performance-related bonus of 100 per cent of his salary if Barclays' profits are at least 6 per cent above the UK retail price index for a consecutive three-year period.
The former inflation measure, the Retail Price Index (RPI), fell to 2.

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