The Retail Price Index (RPI) is a metric that takes the cost of a basket of goods and uses this to measure changes in consumer prices. The RPI has largely been superseded by the consumer price index and other measures of inflation but is still used in the UK for some official purposes.
Historically, the RPI was a standard measure of inflation used by central banks worldwide to measure their conformity to inflation targets. Traders monitored the RPI to make informed decisions when trading the financial markets.
RPI consistently measures inflation as about 1% higher than the now current CPI, and is calculated by taking over 150,000 quotes on 700 different goods. The RPI is used in wage negotiations, where it is popular in no small part due to its higher figures.
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