What is CPI?

CPI, the Consumer Prices Index, is the UK's main measure of inflation. It tracks the change in prices of a basket of goods and services that households typically buy. The Bank of England's 2% inflation target uses CPI. CPI inflation was 3.1% in the year to August 2026.

The ONS collects prices every month for hundreds of items, from milk to haircuts. It weights them by how much households spend on each. The basket is updated every year to reflect changing habits. CPI was 3.1% in August 2026, up from 2.9% in July. CPIH, which adds owner occupiers' housing costs, was 3.3%. Core CPI, which removes energy, food, alcohol and tobacco, was 2.6%. An older measure, RPI, is still used for some things such as student loan interest and index-linked gilts. RPI usually runs higher than CPI. CPI matters to everyone because it is used to uprate many benefits and to set the Bank's interest rate decisions. The ONS publishes CPI every month, giving the rate for the month before. Your own costs may rise faster or slower, depending on what you buy.