I’ve been looking for a reasonable explanation for this for a while and literally cannot find one. SO help me understand, please. ❤️🤷♀️
In: 42
They fluctuate, affect people differently (e.g. people who live in social housing, or own their home outright, aren’t affected much by housing costs as they’re largely insulated from them) and measure different things. Housing, particularly bounces around like a looney disproportionately to everything else and yet if you’re retired or don’t have a mortgage, it might not affect you whatsoever.
In the UK, the government publish CPI (general consumer prices), CPIH (consumer prices including housing costs) and RPI (retail prices of a bunch of selected items) for this reason.
[https://www.ons.gov.uk/economy/inflationandpriceindices](https://www.ons.gov.uk/economy/inflationandpriceindices)
Anyone with a brain should pick a point at which they knew their salary, and plot their salary against the various indices to see how much they should be pitching for at their next pay review.
(A quick and dirty way:
Say you were earning £10,000 in Feb 2022 when the CPIH was 109.4 and want to know what you should be earning in Feb 2023 when the CPIH is 126.
https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/l522/mm23
Divide 10,000 by 109.4, multiply by 126. You should be earning £11,517 now – JUST TO BREAK EVEN. Anything less than that and you’ve taken a paycut in the last two years, because everything else got more expensive.)
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