Have you ever wondered how broadband providers determine their prices?
Well, one of the key factors they consider is the rate of inflation. Specifically, they often look at two measures of inflation: the Consumer Price Index (CPI) and the Retail Price Index (RPI).
The CPI is a measure of the average price of goods and services that households in the UK purchase. The RPI is a similar measure, but it includes a wider range of items and tends to be slightly higher than the CPI.
Broadband providers may use either the CPI or the RPI to determine their prices, or they may use a combination of the two. They may also add on a percentage increase above the rate of inflation, such as three or four per cent.
It’s important to note that each month the UK government announces the rate of inflation, which reflects the percentage increase in prices over the previous 12 months. This information is used by broadband providers to adjust their prices and ensure that they keep pace with inflation.
