CPI definition

CPI stands for consumer price index, an average of several consumer goods and services that are used to give an indication of inflation.

Movements in CPI are usually given in percentages, with positive movements signifying inflation and drops signifying deflation. A major part of the remit of central banks like the Federal Reserve or Bank of England is keeping inflation in line with targets. To do so they will use monetary policy adjustments, like changing the base interest rate.

Often, more than one index of consumer prices will be used to judge inflation in a particular economy, with different goods and services being measured to evaluate different sections of the population. In the UK, both the CPI and RPI (or retail price index) are used. Both are calculated differently, with the RPI taking house prices into account while the CPI does not, for instance.

CPI announcements are made by central banks on a regular basis

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Check on upcoming CPI announcements on the economic calendar.

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