Glossary · UK
What is Retail Price Index (RPI)?
An older measure of UK inflation, generally running higher than CPI, still used to uprate some rail fares, student loans and index-linked gilts.
Full Definition
The Retail Price Index (RPI) is a long-running UK inflation measure, calculated since 1947, that tracks the change in the cost of a representative basket of goods and services. It has been formally classed as a 'not a national statistic' by the UK Statistics Authority since 2013 because of a known statistical flaw (the 'formula effect') that tends to push it higher than the Consumer Price Index (CPI) -- often by around 1 percentage point. Despite this, RPI is still used to set some annual rail fare increases, some index-linked gilts and pension scheme rules written before the switch to CPI, and historically it set Plan 1 and Plan 2 student loan interest rates (Plan 2 loans still reference RPI plus up to 3%). From 2030, RPI is due to be aligned with CPIH (a variant of CPI that includes owner-occupier housing costs), effectively phasing RPI out.