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Main points

● In January 2023, the annual rate of inflation as measured by the RPI was 6.94 per cent, down from the 7.35 per cent in December 2022 (Table 2).

● The 12-month moving average rate for January stood at 6.41 per cent (Table 2).

● The largest upward impact on annual inflation was measured in the Food Index (+2.28 percentage points) (Chart 3).

Overview

The RPI measures monthly price changes in the cost of purchasing a representative basket of consumer goods and services. A closely related measure of price movements is the Harmonised Index of Consumer Prices (HICP). A description of differences between the HICP and the RPI can be found in Section 5.2 of this news release.

Each monthly RPI news release includes three different measures of inflation:

1. The annual inflation rate measures average price changes between the reference month and the same month of the previous year. Although responsive to recent changes in price levels, this measure can be influenced by one-off effects in either month.

2. The monthly inflation rate compares price changes between the reference month and the previous month. This measure can be highly influenced by seasonal effects.

3. The 12-month moving average rate overcomes the volatility of the above two rates by comparing the average of the latest 12 indices to the average of the previous 12 indices. This measure is less sensitive to temporary changes in prices.

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