Underlying Inflation in the United Kingdom

This box reviews a number of measures that economists and policy makers have used to measure the signal in the price data and to reduce the noise. There may be no single ‘best’ measure that works in all sub-periods, so that analysing a variety of measures is advisable because of shifts in the drivers of movements in the general price level. Thus, there is no unanimous definition nor methodology for a singular measure of ‘core’ or underlying inflation; rather, each measure provides a different insight into the ‘inflation story’ (Mankikar and Paisley, 2002). We believe that incorporating some of these measures that try to extract the signal from the noise could help improve public understanding of the causes of inflation.

See more from our UK Economic Outlooks.