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CPI is an abbreviation of consumer price index. This is a measure of inflation in the UK and is based on a notional basket of goods and services used by the average family excluding most costs associated with housing including mortgage payments, council tax, ground rent, buildings insurance and costs associated with buying houses including estate agents’ fees. It is calculated based on the change in the geometric mean of the basket (as opposed to the arithmetic mean used to calculate the RPI Index which the CPI replaced).

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