Use Our Spreadsheet to Work Out Your Personal Inflation Rate

Use our spreadsheet to calculate your personal rate of inflation

4 August, 2022 | 8:00AM
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Inflation is back with a vengeance. According to the UK Office for National Statistics, the consumer price index (CPI) rose by 9.4% in the 12 months to June 2022, up from 9.1% in May. The primary drivers are energy and transport costs.

But CPI is a broad-brush measure. It captures how prices across the entire economy are changing. The ONS does this by assembling a theoretical "basket" of consumer goods and measuring how much we are spending on each item over time. 

When the price of bread goes up, then, it moves CPI more than if fine wine or caviar do, as bread is an extremely important staple consumer product. But that process may not account for unique and individual experiences of inflation.

The result is divergent experiences. In the UK, fuel is costing around 42% more than it did a decade ago. But if you don't spend any money on fuel because you don't drive, you may still be feeling the pinch of inflation in other ways.

Working out your personal rate of inflation is a good way to shed light on those differences. Our colleagues in Australia have assembled a spreadsheet you can use to do this.

Doing It Yourself

Using the spreadsheet is simple.

1. Click here to download the spreadsheet and save a copy on your computer;

2. Change the currency column from dollars to GBP;

3. In the "Amount you spent over the quarter" column input the amounts that you spent on each category (if you’re not sure how much you spent over the quarter, just multiply your monthly spend by three as a rough approximation);

4. The spreadsheet will automatically calculate your personal rate of inflation for each category (Column F) and your overall personal rate inflation (Cell F17);

Note: If you are confused as to why this isn’t similar to the headline inflation rate, please keep in mind this is a quarterly rate, instead of annual

Morningstar’s Example: Nicola Chand

I calculated my own personal rate of inflation as an example below. At 2.1% over the June quarter, prices for the goods and services I buy rose faster than the 1.8% notched by in the CPI. The culprits were clothing and footwear, food and rent.

I spent more of my income on housing than most households, which experienced price inflation of 2.5% over the quarter, pushing my personal CPI figure up. I also spent more on clothing and footwear than average households, which had a major impact on my CPI, with the category experiencing the largest price increase over the quarter jumping 3.5%.

On the other hand, I spent less on furnishing, household equipment and services than the average household.

This article was originally published on Morningstar Australia by Nicola Chand, and is reproduced here with UK-specific insight

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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