What is headline and core inflation?.what is base effect?

Question

What is headline and core inflation?.what is base effect?

Answer 1

In the UK headline inflation is measured by the CPI (Consumer Price Index). This is currently 4.4%. Core inflation strips out certain items which are known to be volatile in price eg. oil and food. This is said to be more representative of inflation in the long run. UK core inflation is currently 1.9%.

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