Index number: what it means

A number that shows how a value compares with a chosen reference period set to 100. An index of 110 means 10% higher than the reference period.

An index number expresses a series relative to a reference period, usually set equal to 100. Price indices such as CPI are published as index numbers, and inflation rates are calculated from them.

Worked example

Suppose a hypothetical index is 100 in the reference year, 125 in year five and 130 in year six.

• Between the reference year and year six, the value rose by 30%.
• Between years five and six it rose by 5 index points, but by 4% (5 divided by 125). Points and percentages are not the same once the index has moved away from 100.

How it trips up claims

• A fall in an index "by 2 points" is not a 2% fall unless the index stands at 100.
• Index levels from series with different reference periods cannot be compared directly; compare their percentage changes instead.
• When producers rebase an index to a new base year, every level changes but the growth rates should not.

The ONS publishes the CPI index (2015=100) as series D7BT and the RPI index (January 1987=100) as series CHAW.

Also searched as: index, 2015=100, index points, what is an index number

Official definitions: ONS: CPI index, all items, 2015=100 (D7BT) · ONS: RPI all items index, January 1987=100 (CHAW)

Key figures where it matters

• UK average house price
• UK RPI inflation rate
• UK food price inflation
• UK labour productivity (output per hour)
• Pound to US dollar exchange rate

Questions that use this term

• How is UK inflation measured?
• What is the difference between CPI, CPIH and RPI?

Related terms

• Base year: The reference period against which an index is set to 100, or whose prices are used to express real-terms figures.
• CPI (Consumer Prices Index): The UK's main measure of consumer price inflation for the Bank of England's 2% target. It tracks the prices of a basket of goods and services bought by households.
• RPI (Retail Prices Index): An older UK price index still used in some contracts, index-linked gilts and student loans. It is not an accredited official statistic and usually runs above CPI.
• Percentage point: The arithmetic difference between two percentages. A rise from 4% to 5% is one percentage point, but a 25% increase in the rate.

More measuring change over time terms: Real terms · Cash terms · Percentage point · Year-on-year change · Quarter-on-quarter change · Rolling average · Base year · Seasonally adjusted · Base effect · Compound annual growth rate · Discontinuity (break in series).