The Office for National Statistics produces a number of measures of inflation covering
consumer prices, producer prices and corporate services prices. Indexes for GDP,
GDI and CPI have been used here and are explained below. The Halifax House Price
Index was also used.
Gross Domestic Product (GDP)
Gross Domestic Product is a measure of the UK's economic activity. GDP is an integral
part of the UK national accounts and provides a measure of the total economic activity
in a region. GDP is often referred to as one of the main 'summary indicators' of
economic activity and references to 'growth in the economy' are quoting the growth
in GDP during the latest quarter. Here, the average GDP for the whole calendar year
is used. Where GDP levels are used in graphs for individual charities, the GDP value
is apportioned accordingly to appear on the graph.
For more information visit: www.ons.gov.uk
Gross Disposable Income (GDI)
Gross disposable household income, known as household income, represents the amount
of money available to individuals less taxes, National Insurance and pension contributions,
property costs (e.g. mortgage interest) and other interest paid (e.g. bank loans).
A value is apportioned accordingly to appear on the graph.
For more information visit: www.ons.gov.uk
The Consumer Prices Index (CPI)
The Consumer Prices Index has been designed as a macro-economic measure of consumer
price inflation and forms the basis for the Government's inflation target that the
Bank of England's Monetary Policy Committee is required to achieve. It has been
developed according to internationally agreed rules and internationally is known
as the HICP. The HICP is the preferred measure for international comparisons of
inflation.
The index used sets 2005 as the base year and adjusts each yearly value in relation
to the index compensating for rises/falls in inflation. The index is available from
the Office for National Statistics.
For more information visit: www.ons.gov.uk
Halifax House Price Index (HPI)
Launched in 1984, the Halifax House Price Index is based on the lending of the mortgage
lender and provides the longest unbroken monthly data series of any UK housing index.
The index is calculated on a monthly basis and provides a robust and representative
sample of the entire UK market. A yearly average value is used here and once again
the value is apportioned accordingly to appear on the graph to show relative growth
levels.
For more information visit: www.hbosplc.com/economy/indexmethodology.asp