Personal Inflation Calculator: What is your inflation rate?
This calculator currently includes data for the UK, US and Japan using the following sources:
What measures of inflation does the calculator use?
There are some variations in the CPI. We have used the following measures for each country:
UK: CPIH, which is the CPI plus imputed rental costs for homeowners
US: CPI-U (not seasonally adjusted), which measures price changes for all urban consumers (about 93 percent of the total US population) and includes imputed rental costs for urban consumers. home owners.
Japan: CPI, which is CPI plus imputed rental costs for homeowners
Should I enter irregular purchases, such as flights or appliances?
We recommend using the inflation calculator only for your regular monthly expenses, as the inflation you experience for one-time purchases will depend on when you make the purchase. This approach is best for understanding your personal inflation trend, which is the rate of inflation you have experienced for this same monthly basket in previous months. However, this approach is less comparable with the national inflation rate, since it excludes irregular purchases.
However, you can choose to use the calculator to find your personal inflation rate in the following alternative ways:
Actual expenses for the last month, including irregular purchases. With this approach, you can enter all of your actual expenses in each category, including irregular purchases if you paid for them in the last month. This approach is best for understanding the impact inflation is currently having on your personal finances. Your personal inflation trend is the rate of inflation you would have experienced from making the exact same purchases you made last month in prior months.
The average monthly values of all your expenses. With this approach, you can include both your regular monthly expenses and an average “cost per month of use” for any irregular purchases. This approach is better for comparing your personal inflation rate with the national inflation rate, but it does not necessarily reflect the inflation you will have experienced from making an irregular purchase.
How should I enter my housing costs if I am a homeowner?
For the purposes of this calculator, you can enter how much you spend on mortgage payments and home insurance under “Rent/mortgage” and how much you spend on home repairs and improvements under “Household items and maintenance.” Taken together, these act as a proxy for owner-occupant housing costs.
The way owner-occupier inflation rates are measured is a bit tricky, since buying a property is considered both an investment and a service. As a result, it is sometimes handled differently in consumer price indices.
We’ve chosen CPI measures for this calculator that take into account the costs of servicing homeownership for homeowners through a method known as “rental equivalency.” This uses the rent that a landlord would have to pay for the property in which he lives as an indicator of the housing services he provides.
Are all items of spending included in consumer price indices?
No, spending on the following products is generally considered to be outside the scope of consumer price indices: investments; cash gifts, including donations and tips; game; credit charges; interest payments on loans; and taxes not associated with consumer goods and services.
Does the inflation calculator take into account variations in the prices of different items?
No, this calculator does not reflect:
Where in your country you buy a product. For example, housing cost inflation is based on a national average, rather than price changes in your area.
How are national inflation rates calculated?
While there is some variation between countries, the following steps are typically taken to calculate national inflation rates:
Each month, price collectors record prices for the same set of products and for a large sample of stores across the country and online.
Price changes for specific products at specific stores are aggregated into an overall price change for each item type and indexed to represent the relative price change for that item type over time.
Items are then weighted to ensure they reflect their relative importance in the overall shopping cart. The weights are usually based on average household spending and are updated regularly (every one to two years) to reflect changes in consumer behaviour.
The general consumer price index is calculated through a weighted average of price changes.
How is my personal inflation rate estimated?
Your personal inflation rate is calculated in a similar way to the national inflation rate, but has necessarily been simplified as follows:
First, the calculator collects and calculates the most recent and historical 12-month price index data for each spending category from the relevant national statistical authority in the country you have selected.
The calculator then defines the weight to apply to price inflation for each category based on the spending data you provide.
The calculator then mimics the calculation made by the national statistics authority to produce a headline personal inflation rate for each month from January 2021 to the latest month for which we have data. In doing so, the calculator assumes that the portion of your spending in each category stays the same each month.
Please note that the personal inflation rate figure we produce may include a rounding error as we are using published figures that have been rounded by the national statistics authority.