Thing is people do not have the memory of goldfish, they remeber paying significantly less for things only a few years ago.
March 2011 "since February 2007, the price of a loaf of bread has risen by 30%. Gas and electricity are up 23%"
http://www.guardian.co.uk/commentisfree/2011/mar/23/inflation-wrong-type
I think everyone thinks inflation is higher than the government figure. Because when people look at the price of things they buy every week like food and fuel or every month like utility bills or rent if they are in rented accommodation have gone up more than the headline figure. While income has failed to keep pace with inflation so they have less money left in their pocket after each weekly shop, etc...
But the headline figure is lower because the basket of goods includes things like electrical goods that have gone down in price, that are bought infrequently.
CPI inflation also uses a geometric mean for the price of goods so a cheap version of the good drives the average down more than using standard arithmetic mean. CPI as it were assumes people shop around and switch to cheap alternative goods.
Deciding to switch to a cheaper alternative of a good because of price makes people think inflation is a problem, rather than the availability of a cheaper alternative good making them think inflation is not a problem
Current government official year on year inflation September 2011 5.2% CPI
Some claiming inflation is much higher, I can see why they have little faith in official figure
11.2% Total inflation July 2007 to July 2011 incorrectly using CPI from 2010 and RPI before
23.6% Total inflation July 2007 to July 2011 RPI single pensioner household.
CPI the governments prefered inflation measure from 2010.
14.4% Total Inflation July 2007 to July 2010
4.4% July 2011, 3.1% July 2010, (1.8% July 2009) (4.4% July 2008)
RPI the governments previous prefered inflation measure before 2010
13.6% Total Inflation July 2007 to July 2011
(5% July 2011) (4.7% July 2010) 0.6% July 2009, 2.7% July 2008
RPI two person pensioner households
23.4% Total Inflation July 2007 to July 2011
7% July 2011, 4.9% July 2010, 1.9% July 2009, 7.9% July 2008
RPI one person pensioner household
23.6% Total Inflation July 2007 to July 2011
6.8% July 2011, 4.2% July 2010, 2.2% July 2009, 8.7% July 2008