Consumer price indices and inflation are not the same!

According to Thorsten Polleit central banks "keep gearing their policies towards limiting upward movements of consumer price indices."

Consumer price indices and inflation are two very different things.

Antony Mueller provides an interesting insight into price indices:

'"Price stability" is a misleading and an inherently contradictory concept. When such a construct as the price index becomes the guiding post for central banks, they will tend to produce and reinforce the very instabilities they proclaim to fight.

What is getting published as "the consumer price index" represents a statistical hodgepodge. It can be concocted in almost any way, and one can do this without violating common statistical rules. Hedonic calculation is just one example. But despite all the statistical tricks that are being invented and applied, the core issue remains unresolved: what actually is being measured by "purchasing power" and what is the value of money—other than subjective and individualistic—upon which the calculation could be based?

Along with the statistics related to the figures about the domestic and national product, the price index is one of the most unreliable, most deceiving and most abused statistical economic numbers. This is even more the case as the price index provides the basis for a series of other statistical indicators as it serves as a deflator and enters economic growth and productivity figures.'