The RSS welcomes the key conclusion in the ‘Measuring Inflation’ report from the House of Lords’ Economic Affairs Committee that resources should be put into fixing the Retail Prices Index (RPI) and has set out its response in a statement (PDF). The Society provided technical advice and gave evidence to the Committee during its inquiry.
The report has called for shortcomings in the calculation of the RPI to be addressed and for an end to successive governments' practice of so-called ‘inflation shopping’.
The RSS has long been involved in discussions around the shortcomings of the current RPI measurement, as our statement in October 2018 (PDF) sets out.
Steve Penneck, RSS’s National Statistics Advisory Group chair, says: ‘Now is the time for the ONS and the government to grasp the nettle and take the required steps to sort out the current confusion, which the Committee has rightly condemned. Just as importantly, it has set out a positive, practical and achievable timetable for reform. We now look forward to seeing the UK Statistics Authority’s, and indeed Ministers’, response to the recommendations relating to fixing RPI. A plan that will decisively address the issues and shortcomings which have been highlighted by the Committee is now needed.’
The report recognises the value of different indices for different users, which reflects our stance and support for the continued development of household costs indices. However, the report also recommends the development of just one measure of inflation for government use; we are concerned that this could run contrary to the need for different indices for macroeconomic and household-focused purposes.