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It used to be the RPI, currently it’s the CPI but soon it’ll be the CPIH. What are we talking about? The way inflation is measured by the official statistics.

RPI – the Retail Prices Index – was for a long while the official measure of inflation. But some years ago the RPI was downgraded as a ‘national statistic’ - although it’s still widely used by pay setters as a guide to the cost of living. RPI was replaced by the Consumer Prices Index (CPI). Meanwhile the Office for National Statistics (ONS) has been experimenting with two new measures of inflation – RPIJ and CPIH, with a view to one of them eventually becoming the preferred national inflation statistic. The ONS considered that RPIJ was an improved variant of the RPI calculated using formulae which meet international standards. CPIH on the other hand includes owner-occupiers’ housing costs, i.e. the costs of housing services associated with owning, maintaining and living in one’s own home.

In its statistical release for the January inflation figures, the ONS has announced that from March 2017, the CPIH will replace the CPI as the headline measure of inflation. The ONS has decided against using the RPIJ and its publication will be discontinued. The CPI and RPI figures will however continue to be published for a while yet.

It’ll be interesting to see which of these three measures pay setters decide to use in the coming months and years.

Further details about CPIH can be found here on the This is Money website.