The RPI (“retail prices index”) is the UK average measure of changes in prices. While the CPI is a similar sort of measure, it is compiled under an EU formula. In fact, the figures indicate that the similarities seem to be greater by far than the differences.
The CPI excludes Council Tax, mortgage interest and some other housing costs. On the other hand, the CPI includes some items which are not in the RPI scope, such as charges for financial services. It is likely that the CPI will become more RPI-like or perhaps the other way around; we’ll see what the Consumer Prices Advisory Committee does (see here for CPAC papers). On 08 October 2012, ONS launched a consultation on modifying the RPI but the decision was taken to leave as it was.
Effectively, the CPI covers a broader population sample than the RPI. In practice, for given price data, the CPI inflation rate is always lower than the RPI inflation rate.
Two charts are attached, comparing CPI with RPI. The first shows the indices from 1975 through 2012 (as at 31 December). The second chart shows the differences by duration (average and standard deviation). There is a relatively steady difference of around 0.8% pa. which is still a bit surprising. Variations across months are slight.