MEASURES

Consumer price index (CPI)

An index of the prices of a fixed basket of goods and services bought by households.

4 min read · Reviewed September 2026

In plain words

The CPI tracks the cost of a fixed set of goods and services — the "basket" — over time. By setting the index to 100 in a base year, you can see at a glance how much prices have risen: CPI of 125 means prices are 25% above the base year level.

Frequently asked questions

What is CPI and how is it calculated?

CPI (Consumer Price Index) tracks the cost of a fixed basket of goods and services over time. Each month, price collectors survey thousands of outlets, then the index is computed as a weighted average of price relatives.

What is the difference between CPI and HICP?

HICP (Harmonised Index of Consumer Prices) is the EU-standard version of CPI, designed for cross-country comparison. It excludes some owner-occupier housing costs and uses slightly different weighting methods.

Cite this term

InflationTheGuide. "Consumer price index (CPI)." InflationTheGuide Glossary, reviewed September 2026. https://inflationtheguide.com/glossary/consumer-price-index-cpi