When the Office for National Statistics (ONS) publishes its monthly inflation figure, it is describing the average change in prices for a particular basket of goods and services. Whether that matches your own experience depends on what you buy, how you pay for housing, and which measure is being quoted.
Three measures, three jobs
The UK publishes several inflation measures, and they are not interchangeable.
- CPI, the Consumer Prices Index, is the measure the Bank of England targets. The government sets the target at 2%, and the Bank’s Monetary Policy Committee adjusts interest rates to try to meet it.
- CPIH is CPI plus owner occupiers’ housing costs and council tax. The ONS describes it as its lead measure of consumer price inflation because it covers the cost of housing for homeowners as well as renters.
- RPI, the Retail Prices Index, is an older measure that the statistics regulator no longer classes as a national statistic. It is still used in some index-linked contracts, which is why it has not disappeared.
The headline figure can differ depending on which is quoted, so it is worth checking the label before comparing numbers across articles, pay deals or contracts.
What is in the basket
Each year the ONS updates the basket to reflect what people spend money on. For 2026 it contains 760 items, after 27 additions and 19 removals. The additions include houmous, alcohol-free beer, pet grooming, motorhomes and dashboard cameras; the removals include sheets of wrapping paper and bottled premium lager bought in pubs and restaurants.
The weights, which set how much each category affects the index, come from household spending data. The February 2026 CPIH weights show how housing dominates:
| Category | Weight in CPIH |
|---|---|
| Housing and household services | 31.4% |
| Recreation and culture | 12.0% |
| Transport | 11.1% |
| Restaurants and hotels | 11.0% |
| Food and non-alcoholic beverages | 8.7% |
| Miscellaneous goods and services | 7.5% |
| Clothing and footwear | 4.5% |
| Furniture and household goods | 4.3% |
The remaining divisions, covering alcohol and tobacco, health, communication and education, make up the rest.
Why your rate can differ from the headline
The headline is an average across all households, and no household is average. A few UK-specific reasons:
- Mortgage interest is not in CPI. A homeowner whose mortgage rate has gone up will feel a squeeze that CPI does not capture directly. CPIH counts housing through an imputed rent for owner occupiers, not what people actually pay on their mortgage.
- Different spending mixes. A household that drives a lot, rents privately or spends heavily on food will have a different experience from a retired couple with no mortgage.
- Frequent versus occasional purchases. Prices of things bought weekly, such as groceries and fuel, are more noticeable than prices of things bought rarely, so perceived inflation often runs ahead of the measured rate.
- Quality and choice changes. Statisticians adjust for improvements in some goods, such as phones, which can make the measured price change smaller than the change in what a shopper actually pays at the till.
An annual rate is not a price level
The headline number is a rate of change, not a price. If a price index goes from 100 to 110 over a year, annual inflation is 10%. If prices then stay flat for the next twelve months, the annual rate falls to 0%, yet nothing has become cheaper. “Inflation is falling” means prices are rising more slowly, not that they are coming down.
This also explains base effects. A large price jump twelve months ago drops out of the annual comparison, so the annual rate can fall sharply even when prices this month are unchanged.
How to use the figure
For personal decisions, a few habits help:
- Check which measure a pay offer, rent rise or benefit uplift is linked to.
- Compare your own spending to the category weights to see which prices matter most to you.
- Look at a few months of data rather than a single release, since monthly figures are noisy and can be revised.
The Bank of England’s interest-rate decisions respond to inflation, but also to wage growth, spending and expectations. How Bank of England rate decisions ripple through the economy explains that link.
This is general information, not financial advice. Figures reflect ONS publications at the time of writing and are updated regularly.
Sources: Office for National Statistics, UK consumer price inflation basket of goods and services: 2026; ONS guidance on CPI, CPIH and RPI; Bank of England explanatory materials on the inflation target.
