Comment - Inflation review and outlook

There are two main measures of inflation, namely the Consumer Prices Index (CPI) and the Retail Prices Index (RPI). The main difference between CPI and RPI is that the latter includes mortgage interest payments and housing costs. Inflation in the UK has been highly topical in recent months due to the sharp rise in both the CPI and RPI rates. April saw CPI reach its highest level in seventeen months as the inflation rate hit 3.7%, which is significantly higher than the Bank of England target rate of 2% and is also the highest level since November 2008. The RPI rate also rose sharply, reac...