The consumer price index (CPI) is a measure of change in the general level ofprices of goods and services bought by households over a specified period oftime. It compares a household's cost for a specific basket of finished goods andservices with the cost of the same basket during an earlier benchmark period.The consumer price index is used as a measurement of inflation and is a keyeconomic figure. Likely impact:1) Interest Rates: Larger-than-expected quarterly increase in price inflation orincreasing trend is considered inflationary; this will cause bond prices to dropand yields and interest rates to rise.2) Stock Prices: Higher than expected price inflation is bearish on the stockmarket as higher inflation will lead to higher interest rates.3) Exchange Rates: High inflation has an uncertain effect. It would lead todepreciation as higher prices mean lower competitiveness. Conversely, higherinflation causes higher interest rates and a tighter monetary policy that leadsto an appreciation.

The consumer prices index (CPI) is the main United Kingdom domestic measure ofinflation for macroeconomic purposes. The uses of the retail prices index (RPI)include indexation of pensions, state benefits and index-linked gilts. Bothmeasure the average change from month to month in the prices of consumer goodsand services purchased in the UK, although there are differences in coverage andmethodology.Both the CPI and the RPI are compiled each month using the same underlying pricedata, based on a large and representative selection of around 650 individualgoods and services for which price movements are measured in around 150 areasthroughout the UK. Around 120,000 separate price quotations are used every monthto compile the indices.The CPI and RPI can be thought of as measuring the monthly cost of a very largeshopping basket comprising all the different kinds of goods and services boughtby consumers in the UK. As the prices of individual items in the basket varyover time, the total cost of the basket will change. The spending patterns onwhich the CPI and RPI are based are reviewed annually.

The consumer prices index (CPI) is the main United Kingdom domestic measure ofinflation for macroeconomic purposes. The uses of the retail prices index (RPI)include indexation of pensions, state benefits and index-linked gilts. Bothmeasure the average change from month to month in the prices of consumer goodsand services purchased in the UK, although there are differences in coverage andmethodology.Both the CPI and the RPI are compiled each month using the same underlying pricedata, based on a large and representative selection of around 650 individualgoods and services for which price movements are measured in around 150 areasthroughout the UK. Around 120,000 separate price quotations are used every monthto compile the indices.The CPI and RPI can be thought of as measuring the monthly cost of a very largeshopping basket comprising all the different kinds of goods and services boughtby consumers in the UK. As the prices of individual items in the basket varyover time, the total cost of the basket will change. The spending patterns onwhich the CPI and RPI are based are reviewed annually.