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  • About the Economic Futures Hub
  • Unit 1: Economics of the Market
  • Unit 2: UK Economic Activity
  • Unit 3: Global Economic Activity
  • Data for Applied Economists
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How is the CPI calculated?

Flashcard Definition

1. Selecting the basket 2. Tracking the prices 3. Calculating the Index

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How is the CPI calculated?

  1. Selecting the basket: Based on surveys of household spending to reflect the spending habits of a 'typical' consumer.
  2. Tracking the prices: Each month, the prices of all items in the basket are collected from a range of retailers.
  3. Calculating the index: The change in price of each item is calculated and these changes are averaged, with more weight given to items that people spend more money on. This average price change is then converted into an index.