what does rpi vs cpi inflation mean?

hugheskevi

RPI tends to be 0.5% higher than CPI due to different method of calculation

The Office for Budgetary Responsibility's last report (March) said that their long-run expected difference between RPI and CPI was 1.2% p/a, with a slightly larger difference in the next few years.

CPI is the internationally accepted standard

CPI is the internationally comparable standard - the correct index to use depends on what you want to use the figures for.

No wonder the Government prefers it.

The Government use RPI for some purposes and CPI for other purposes.

gunmaker

I have no doubt that when, and if, the CPI becomes larger than the RPI the Government and private pensions will do a "U" turn and base pension & benefit increases back on the RPI.

kidmugsy

CPI was introduced as the new target for the BoE by Brown. The financial pages carried predictions at the time that it would eventually be used for many other purposes - uprating pensions, Index-Linking Gilts etc etc - some of which have now come to pass.