The Consumer Price Index is the official inflation measure of the United Kingdom.

The traditional measure of inflation in the UK for many years was the Retail Price Index, which was first calculated in the early 20th Century to evaluate the extent to which workers were affected by price changes during the first world war. An explicit inflation target was first set in October 1992 by then-Chancellor of the Exchequer Norman Lamont following the departure of the UK from the Exchange Rate Mechanism. Initially, the target was based on the RPIX, which is the RPI calculated excluding mortgage interest payments. This was felt to be a better measure of the effectiveness of macroeconomic policy. It was argued that if interest rates are used to curb inflation, then including mortgage payments in the inflation measure would be misleading. Until 1997, interest rates were set by the Treasury. Norman Stewart Hughson Lamont, Baron Lamont of Lerwick, PC (born 8 May 1942) was Conservative Member of Parliament for Kingston-upon-Thames, England from 1972 until 1997. ... The European exchange rate mechanism (or ERM) was a system introduced by the European Community in March 1979, as part of the European Monetary System (EMS), to reduce exchange-rate variability and achieve monetary stability in Europe, in preparation for Economic and Monetary Union and the introduction of a single...

On winning power in May 1997, the New Labour government handed control over interest rates to the Bank of England, whose Monetary Policy Committee now sets rates on the basis of an inflation target set by the Chancellor.^[1] If in any month inflation is more than one percentage point off its target, the Governor of the Bank of England is required to write to the Chancellor explaining why. New Labour is an alternative name of the British political Labour Party. ... Headquarters London Governor Mervyn King Central Bank of United Kingdom Currency Pound Sterling ISO 4217 Code GBP Base borrowing rate 5. ... The Monetary Policy Committee (MPC) is a committee of the Bank of England, which meets every month to decide the official interest rate in the United Kingdom. ... The Governor of the Bank of England is the most senior position in the Bank of England. ...

Since 1996 the United Kingdom has also tracked a Consumer Price Index figure, and in December 2003 its inflation target was changed to one based on the CPI. ^[2] The CPI is currently 3.1%, while the RPI (excluding Mortgage Interest) is 3.9% (4.8% including Mortgage Interest). Both the CPI and the RPI are published monthly by the Office for National Statistics. The Office for National Statistics (ONS) is the government executive agency charged with the collection and publication of statistics related to the economy, population and society of the United Kingdom at national and local levels. ...

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