CPI (consumer price index)
The basket-of-goods index used to measure inflation — what goes in it and what a CPI figure actually claims.
The consumer price index (CPI) tracks the cost of a fixed basket of everyday goods and services over time. It’s the standard yardstick for inflation: when people say prices rose by a certain percentage over the past year, they usually mean the CPI moved by that much.
How to read it
A CPI inflation figure is an average across the whole basket, not a measure of any single product or person. It blends food, energy, housing, transport, and dozens of other categories into one number, weighted by how much a typical household spends on each. That average can sit well above or below what you actually feel in your own bills.
Your personal inflation rate depends on your spending pattern. If you spend heavily on categories that are rising fast, such as energy or rent, your real cost of living can climb faster than the published CPI. If your spending leans towards categories that are flat or falling, you might barely notice the inflation the headline number describes. Neither experience is wrong; they’re just different slices of the same basket.
Not to be confused with
CPI is not a price cap or a limit on how much anything can cost. It’s a measurement, not a regulation. It’s also not a cost-of-living index built around one person’s or one household’s actual spending; it’s a broad average designed for comparability across an entire economy. National statistics offices publish the official baskets and weightings behind their CPI, and the exact goods, services and weights differ from country to country.
Questions people ask
What is CPI?
CPI, the consumer price index, tracks the cost of a fixed basket of everyday goods and services over time, and it's the standard measure used for inflation. Your own personal inflation rate can differ from the published CPI figure, because your actual spending pattern is never quite the same as the average basket the index is built from.