inflation rate

/ɪn'fleɪʃ(ə)n reɪt/ noun

a figure, in the form of a percentage, which shows the amount by which inflation has increased over a period of time, usually a year.

Also called rate of inflation

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‘…the decision by the government to tighten monetary policy will push the annual inflation rate above the year’s previous high’ [Financial Times]

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‘…when you invest to get a return, you want a ‘real’ return – above the inflation rate’ [Investors Chronicle]

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‘…the retail prices index rose 0.4 per cent in the month, taking the annual headline inflation rate to 1.7 per cent. The underlying inflation rate, which excludes mortgage interest payments, increased to an annual rate of 3.1 per cent’ [Times]

COMMENT: The inflation rate in the UK is calculated on a series of figures, including prices of consumer items: petrol, gas and electricity, interest rates, etc. This gives the ’underlying’ inflation rate which can be compared to that of other countries. The calculation can also include mortgage interest and local taxes which give the ’headline’ inflation figure. This is higher than in other countries because of these extra items. Inflation affects businesses, in that as their costs rise, so their profits may fall and it is necessary to take this into account when pricing products.