retail price index

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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 The RPI was considered a primary tool in determining how people are experiencing inflation, but it has largely been superseded by the Consumer Price Index.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.
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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.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
A further complication if Wales were to adopt CPI is that the UK Government has ordered the use of RPI to calculate fares increases "between English stations" in the franchise.
Limits on whether to consider a nonparty as a RPI have arisen in cases involving co-defendants or related corporate entities.
37 in the RPI. Oregon also hosts two games against Gonzaga, which is 20-21 overall.
e current annual price-rise formula is for regulated fares, which include season tickets, to rise by the rate of RPI plus 1%, which could see average fares going up around 3.6%.
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The RPI has traditionally been used by the Government to calculate interest on gilt investments and public pensions, so a rise in RPI will always be reflected in the public purse.
Philip Bray, a retirement and pensions specialist at Investment Sense, said: "Any change to the way in which RPI was calculated would have reduced the annual rises for those retirees lucky enough to have index-linked pensions and annuities."
The danger for investors in the current market is that whilst RPI linked leases appear to be a more attractive proposition than UORR, the contrasting directions of open market rental value growth and RPI means that it would be punitive for most occupiers to accept these terms.
Inflation is calculated in two ways, the Retail Price Index (RPI) and the Consumer Price Index (CPI).
(RPI) - a Santa Ana, Calif.-based provider of store brand and contract manufacturing services for dietary supplements - said after a thorough and complete audit of its softgel manufacturing facilities, the State of California's Department of Public Health, Food and Drug Branch determined that the operations, facilities and staff qualifications of RPI are compliant with standards for the grant of a drug manufacturing license.