For the first time in several generations, inflation is a concern for people in the UK. The Consumer Price Index (CPI) rose by 9% in the year to April 2022, the highest 12-month inflation rate since reliable records began. At the same time, GDP growth has slowed to almost zero, sparking fears of the return of stagflation – a period of rising prices without noticeable economic growth. The last time this situation vexed economists and politicians was in the 1970s.
This means people are paying more attention to the measures of inflation – or price indices – that tend to be relegated to background noise during more positive economic times. In recent months, getting to grips with these measures has become central to understanding the nature of the UK’s cost of living crisis.
