CPI Data
In short
The Consumer Price Index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services. It is the primary tool used to track inflation within an economy.
In plain words
It tracks how much more expensive everyday things like food, fuel, and rent become. When the CPI goes up, your money does not buy as much as it did before. This rise in prices is called inflation.
A simple example
If a loaf of bread costs £1.00 this year and £1.05 next year, the CPI helps calculate that specific price increase. It does this for thousands of items at once to find an average.
Why it matters
Central banks use this data to decide whether to raise or lower interest rates. High CPI figures often lead to higher interest rates to stop prices from rising too fast.
Easy to mix up
Do not confuse CPI with PPI (Producer Price Index), which measures price changes from the perspective of manufacturers rather than shoppers.