The Consumer Price Index (CPI) is the government backed measure of inflation in the United Kingdom (UK). It is calculated monthly by the Bank of England. In the middle of the month the Bank of England collects the prices of 700 different items from 120,000 different retail outlets. Then it uses these to establish the cost of these product. (It was not clear to me which average was used here.) Then they take a weighted (by average use) Geometric mean of these prices to see the cost of living. (“The Geometric mean was used instead of the Arithmetic mean to exaggerate items at the lowest levels.” Don’t really understand what they mean by this.) This is normalised by that cost of the basket at the beginning of the index.