A measure of the total inflation within an economy, including such as food and energy prices is called

Question

Question

This question was previously asked in

UKPSC Combined Upper PCS (Prelims) Exam (General Studies) Official Paper-I (Held On: 14 Jul, 2024)

Answer 1

The correct answer is option 1.

Key Points

What is Headline Inflation?

Headline inflation is the total inflation in an economy, measured by a price index (like the Consumer Price Index – CPI).
It includes all items in the basket of goods and services, including volatile components like:
- Food
- Fuel
- Energy prices. Hence, option 1 is correct.
It reflects the overall change in prices that directly affects consumers and is most commonly reported in news and economic discussions — hence the term “headline.”

Additional Information

Core Inflation:
- Excludes volatile items like food and fuel to show underlying inflation trend.
Refined Core Inflation:
- A technical variation of core inflation — not commonly used as a standard inflation measure.