Prices, location and spread
Prices, location and spread

Start this free course now. Just create an account and sign in. Enrol and complete the course for a free statement of participation or digital badge if available.

Free course

Prices, location and spread

5 The UK government price indices

‘The huge squeeze on Brits was laid bare today as figures showed inflation has soared to a 20-year high.’ (The Sun, 18 October 2011)

‘Overall, prices in the economy rose 0.6% on the month from August.’ (Guardian, 18 October 2011)

‘Inflation in the UK continued to fall in February, thanks largely to lower gas and electricity bills.’ (BBC News website, 20 March 2012)

‘UK inflation rises more than expected.’ (Daily Telegraph, 16 August 2011)

How often have you read or heard statements like these in the media? Have you ever wondered how ‘inflation’ is measured, or precisely what is meant by a statement such as ‘prices rose by 0.6%’? In Subsection 5.3, you will see that ‘rates of inflation’ are often calculated in the UK using an index of prices paid by consumers, the Consumer Prices Index (CPI), or another slightly different index, the Retail Prices Index (RPI). These indices may be used to calculate the percentage by which prices in general have risen over any given period, and (roughly speaking) this is what is meant by inflation. But what exactly do these price indices measure, and how are they calculated? These are the questions that are addressed in this section.

M140_1

Take your learning further

Making the decision to study can be a big step, which is why you'll want a trusted University. The Open University has 50 years’ experience delivering flexible learning and 170,000 students are studying with us right now. Take a look at all Open University courses.

If you are new to University-level study, we offer two introductory routes to our qualifications. You could either choose to start with an Access module, or a module which allows you to count your previous learning towards an Open University qualification. Read our guide on Where to take your learning next for more information.

Not ready for formal University study? Then browse over 1000 free courses on OpenLearn and sign up to our newsletter to hear about new free courses as they are released.

Every year, thousands of students decide to study with The Open University. With over 120 qualifications, we’ve got the right course for you.

Request an Open University prospectus371