Dataset details: CRDA/61/DS/2

The Consumer Prices Index (CPI) measures the average change from month to month in the price of consumer goods and services purchased in the UK. The CPI forms the basis for the Government’s inflation target; in December 2003, it replaced the Retail Prices Index (RPI) as the principal UK domestic measure of inflation for macro-economic purposes.

It is also an internationally comparable measure of inflation, and from January 1999 has been used by the European Central Bank as a measure of price stability for the Euro. The CPI was published in the UK until 10 December 2003 as the Harmonised Index of Consumer Prices (HICP). 1 Despite this change of name, the CPI and HICP are the same index and are calculated using European regulation rules.

The dataset was downloaded by NDAD from the Office for National Statistics website on 31 March 2004. The data was captured in text format and in Navidata format. The CPI and RPI data were downloaded as a single batch, held in 20 numbered indices. For further information about subsequent treatment of these indices by NDAD, see Digital processing and conversion.

The dataset as accessioned by NDAD comprises a snapshot of the Consumer Prices Index for the years 1988-2003. The original data as transferred to NDAD (see Source of acquisition) contained a few tables with a very small amount of additional data, some of which appears to pre-date 1988 and some of which post-dates 2003. This has not been included as part of this accession. 2

• Range of goods and services covered – excludes Council tax and housing charges, but includes charges for financial services
• People whose expenditure is covered by the weighting – CPI covers more people than the RPI
• Formulae used to calculate the price changes – meaning that the CPI usually shows a lower inflation rate
• Classification of goods and services – CPI follows an international set of definitions

The CPI covers the following categories of goods and services: food and non-alcoholic beverages; alcoholic beverages and tobacco; clothing and footwear; housing, water, electricity, gas and other fuels; furniture, household equipment and maintenance; health; transport; communication; recreation and culture; education; restaurants and hotels; and miscellaneous goods and services.

Compared with the RPI, the CPI has a shorter history. The official CPI series starts in January 1996, although estimates are available back to 1988. These estimates are included in the CPI dataset, described as 'reconstructed from available data'. 3 Price levels in the CPI are expressed relative to the reference date 1996, when the index has a value of 100. (This compares to the reference date of January 1987 in the RPI).

The dataset is a time series. It covers the CPI-related indices published monthly in Focus On Consumer Price Indices – formerly known as Consumer Price Indices Business Monitor MM23. This includes the all-items index, detailed figures by divisions, groups and classes, annual inflation and monthly percentage changes, weights used to produce the indices, contributions to the changes in the all-items index, and international comparisons in European Union countries.

The dataset as downloaded from the ONS website originally comprised a mixture of both RPI and CPI data, held in 20 numbered indices.

One table (Number 3.5) was included in the original transfer, but after completion of the Navidata extraction process by NDAD, the table appeared to be empty. In fact, the data from 3.5 is identical to 3.6. The identifier had been put in a formula and was not being detected by the Navidata extraction process. The department has advised NDAD that the system has now been changed and for future accruals the 2 tables will have the same data. This small anomaly means that the datasets as accessioned by NDAD comprise a total of 19 tables and not 20.

A further small anomaly concerns tables Number 1.5 and 1.6. Table 1.5 has several fields which contain no data, whereas Table 1.6 contains no data at all. Table 1.5 was used to show the contributions to changes in all items in the CPI, and Table 1.6 was originally used to record the breakdown of differences between the monthly annual percentage change rates of the CPI and the RPI.

In both cases, the department did these operations on a monthly basis (not quarterly or annually), and since the NDAD download is an annual snapshot, presumably this accounts for why neither table contains any data. Table 1.5 can be compared with its RPI equivalent (CRDA/61/DS/1/6) and an equivalent (though not as severe) data gap can be perceived. In the case of Table 1.6 NDAD has taken the decision to retain this empty table (complete with its field structure) within the accession, as it represents part of the original structure of the dataset.

In addition, there were a very small amount of additional data, some of which pre-dates 1988 and some of which post-dates 2003, which were filtered out by NDAD in the processing stage and not included as part of this accession. The reason for this is set out in a note within Scope and content.

The Consumer Prices Index snapshot 1988-2003 dataset and related documentation are open without restriction.

The dataset as downloaded from the ONS website comprised both RPI and CPI data held in 20 indices. These were treated by NDAD as 20 separate tables. Each table has several fields (called 'series' within the Navidata software).

The original numbering scheme which ONS used for their indices has been retained by NDAD, in the titles given to each table. Numbers 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 3.1, 3.2, 3.3 and 3.7 all comprise RPI data and form the Retail Prices Index snapshot 1987-2003 (CRDA/61/DS/1). Numbers 1.1, 1.2, 1.3, 1.4, 1.5, 1.6, 3.4 and 3.6 are CPI data and form the Consumer Prices Index snapshot 1988-2003 (CRDA/61/DS/2). There is no data for Number 3.5; see Digital processing and conversion.

The dataset comprises the following table(s):

Like the RPI, the CPI measured inflation with reference to the changing cost of a fixed basket of goods and services. In most areas, the CPI was calculated from the same basic price data as the RPI, and used similar methodology both in compiling and aggregating the component price indices. However it does differ from the RPI in some specific respects and, in some cases, these differences can have an important influence on the measured rate of inflation. The differences included the coverage and classification of goods and services, the population basis for the weights, and the mathematical formula used to aggregate the prices at the most basic level.

Weighting

The CPI weights covered monetary expenditure within the UK on goods and services that were part of HHFCE. The weights were based on expenditure within the domestic territory by all private households, foreign visitors to the UK and residents of institutions (such as nursing homes, retirement homes and university halls of residence). Given the focus on ‘monetary’ expenditures, imputed expenditures, such as imputed rents and company cars in kind, were excluded.

For further information on weighting in the CPI, see the CPI Technical Manual 2005 Edition (Dataset Documentation Catalogue, reference CRDA/61/DD/1/4), Section 9.3.

Aggregation formula

One of the key differences between the CPI and the RPI is the formula used for the calculation of elementary aggregate indices. The CPI generally uses the geometric mean (GM) whereas the RPI uses arithmetic means - the average of relatives (AR) or ratio of averages (RA).

For further information on the aggregation formula in the CPI, see the CPI Technical Manual 2005 Edition (Dataset Documentation Catalogue, reference CRDA/61/DD/1/4), Section 9.4.

Most of the fields in table 1.5: CPI contributions to changes in all items index (CRDA/61/DS/2/5) are blank.

Table 1.6: A breakdown of the differences between CPI and RPI (CRDA/61/DS/2/6) has no data in the original file transferred to NDAD. See Digital processing and conversion for further details.

1. HICPS are calculated in member states of the European Union for purposes of comparison, as required by the Maastricht treaty.

2. A meeting was held on 10 February 2004, between The National Archives and the Department, with NDAD present. The purpose of this meeting was to facilitate the transfer of the data from the department to NDAD, and a record of the meeting is held as part of NDAD's administrative records. At this meeting, an agreement between The National Archives and the Department was reached, stating clearly that the transfer was to consist of RPI data with 1987 as the 100 base, ie the reference point for comparison. Conversely, CPI data generally only goes back to 1996. UK historical data (the only one of these time series that is not live) goes back to 1988, but the full index is not available in the early years, rather the figures have been reconstructed from available data. NDAD's accessioning actions have therefore been very precise in representing only the date range as agreed; in addition, the inclusion of this earlier data might tend to give a misleading impression to the user, particularly as the dataset is an economic time series.

3. These estimates can be considered a reasonable proxy to the official series. Further details are given in Economic Trends No. 541.