A retail price index is a gauge of consumer inflation. It is calculated by monitoring, normally on a monthly basis, the price of items in a 'basket' of goods and services that a typical household might consume. Each item is weighted to reflect its importance in the basket; the price of electricity more significant than the price of processed fruit. The items in the basket change over time to reflect changes in consumption patterns.

See also: CPI, PPI, Core Inflation, http://www.statistics.gov.uk/CCI/nugget.asp?ID=21