Originally Posted by spinoza

Well, no, but it's no better and no worse than other consumption measures. I do agree that it should include housing costs to be a better reflection of cost of living, but then RPI is available, and most private sector wages are set using RPI.


The Bank of England used to target RPIX, which is RPI eXcluding imputed housing costs. It's calculated differently from CPI and comes out slightly higher. It was changed to CPI to be in line with other European countries. The basket of goods is broadly similar though, in fact I think CPI includes a more representative basket for myself personally. The problem is that we all buy different things - for example I buy less petrol and far more alcohol than in the basket - and it's purely an average measure derived from wide variance in the population at large.