Which of the following measures of inflation is set to be phased out by 2030?

• A. CPI
• B. CPIH
• C. RPI
• D. GDP deflator

Answer: (C)

RPI, the Retail Prices Index, is being phased out because it’s an older and biased measure of inflation. It uses a dated calculation method and still includes mortgage interest payments, which makes it diverge from how most people actually experience price changes. These factors tend to push RPI higher than the more widely used measures.

Official guidance has moved toward CPI and CPIH as the standard inflation measures. CPI uses a geometric mean approach that better reflects consumer substitution between goods as prices change, and CPIH adds housing costs to give a fuller picture of the cost of living. In contrast, GDP deflator is a broad price measure for all domestically produced goods and services and isn’t used as the consumer-facing inflation gauge, so it isn’t the target for phasing out in this context.

So the measure set to be phased out by 2030 is the Retail Prices Index.