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Inflation: What is the latest figure? And why it matters. Check our long-term graph

ONS monitors price changes of hypothetical 'basket' of goods and services

Hazel Sheffield
Friday 15 May 2015 17:05 BST
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A notional shopping basket is part of the equation used to judge inflation
A notional shopping basket is part of the equation used to judge inflation (Photofusion/REX)

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Inflation is the annual rate of increase in the price of goods and services.

Researchers at the Office for National Statistics regularly update a Consumer Price Index (CPI) by monitoring how the price of a hypothetical “basket” of goods and services changes from month to month. The components of this basket are chosen so that it is broadly representative of UK households’ spending patterns.

In normal times the index rises every month. The CPI inflation figure is the change in the value of the index between the latest month and the same month a year earlier.

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