In his Economics Made Easy column in the magazine last week, Allister Heath pointed out that the Consumer Price Index (CPI), the debased European measure of inflation which Gordon Brown insists on using – stands at 2.8 per cent, while the more realistic Retail Price Index (RPI) is at 4.5 per cent and Allister’s personal rate – according to the calculator thoughtfully provided on the Office for National Statistics website – is at around 6.6 per cent.
The difference behind these figures is that the CPI is based on the prices of a basket of goods which includes fast food, supermarket clothing lines, and consumer electronic goods (all of which remain relatively cheap and some of which are still falling in price) and excludes housing costs including mortgages. But professionals like Allister spend much more proportionately on services, school fees and housing costs, all of which are rising rapidly in price.
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