What is the purpose of CPIH?

The purpose of CPIH is to provide a comprehensive measure of inflation that reflects the cost of living, particularly in terms of housing. By including owner occupiers' housing costs, CPIH offers a more complete view of how inflation impacts households. This inclusion is significant because housing is a substantial portion of consumer spending; therefore, integrating these costs allows CPIH to address how rises in housing expenses affect the overall inflation rate experienced by households.

Options that focus on foreign currencies do not relate to the domestic inflation context that CPIH addresses, while exclusion of owner-occupied housing costs would not fulfill the goal of accurately measuring the true cost of living for homeowners. Additionally, focusing solely on rental costs would neglect the significant financial responsibilities faced by owner-occupiers. Thus, including these housing costs is essential for providing an accurate picture of overall inflation and living expenses faced by the population.