{{short description, Measure of inflation
RPIX is a measure of inflation in the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...
, equivalent to the all items
Retail Price Index
In the United Kingdom, the Retail Prices Index or Retail Price Index (RPI) is a measure of inflation published monthly by the Office for National Statistics. It measures the change in the cost of a representative sample of retail goods and servi ...
(RPI) excluding mortgage interest payments.
History
It was the UK's target rate of inflation from October 1992 to December 2003. From June 1997, the
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the Kingdom of England, English Government's banker and debt manager, and still one ...
was given the task of setting interest rates to meet an inflation target of 2.5 per cent on the RPIX measure.
Mortgage interest payments were excluded from the inflation target because otherwise the Bank's behaviour would be distorted. Any rate rise from the Bank, aimed at bringing inflation lower, would have the side effect of raising interest payments on variable-rate mortgages, causing higher inflation on any broad measure such as RPI. Targeting RPI would thus create a vicious circle of higher rates, something avoided by using RPIX as the target.
In December 2003 the Bank's target measure was changed to the
Consumer Price Index
A consumer price index (CPI) is a statistical estimate of the level of prices of goods and services bought for consumption purposes by households. It is calculated as the weighted average price of a market basket of Goods, consumer goods and ...
, or CPI, and the target was set at 2 per cent.
Publication
The RPIX continues to be published each month by the
Office for National Statistics
The Office for National Statistics (ONS; ) is the executive office of the UK Statistics Authority, a non-ministerial department which reports directly to the Parliament of the United Kingdom, UK Parliament.
Overview
The ONS is responsible fo ...
(ONS).
See also
*
Consumer price index
A consumer price index (CPI) is a statistical estimate of the level of prices of goods and services bought for consumption purposes by households. It is calculated as the weighted average price of a market basket of Goods, consumer goods and ...