One of the key indicators that informs us about the performance of the economy is the rate of inflation. This is defined as the percentage rate of increase in the general price level in an economy. During 2022, the rate of inflation accelerated rapidly, giving concerns that the UK was facing a cost of living crisis.
In the UK, the Office for National Statistics publishes three measures of inflation, as explained by Steven Proud in the February 2022 issue of ECONOMIC REVIEW. Most important are the consumer price index (CPI) and the consumer price index housing (CPIH). Both indexes are similar in terms of the method of calculation, the population coverage and the basket of goods and services (about 700 products that people regularly buy are included in the basket) on which they are based.
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