Understanding The Consumer Price Index

June 23, 2016

The Cabinet Office is advising today [June 23] that the Department of Statistics has released Understanding the Consumer Price Index.

“The Understanding the Consumer Price Index is a handy guide designed to provide users of the consumer price index with information about its purpose, compilation and use,” a spokesperson said.

“The public will be aware that Officers from the Department of Statistics routinely track prices of a fixed basket of retail goods and services known as the consumer price index shopping basket. Each good or service that is priced falls into one of the nine subdivisions or indices. Combined, the indices form the All-Items index.

“The primary purpose of the consumer price index is to measure the rate of inflation or the rate of price change for consumer products. Index numbers are used to determine price changes between specified periods and as a price deflation and price escalation tool.

“Index numbers can also be used to calculate changes in the purchasing power of money over time. The consumer price index is used widely to adjust contractual payment arrangements such as rental agreements, insurance premiums and pensions.”

The ‘Understanding the Consumer Price Index’ follows below [PDF here]:

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Category: All, Business