The RSS has today said that it “strongly disagrees” with the Treasury and UK Statistics Authority’s (UKSA) plans for the Retail Prices Index (RPI).
In February 2019, UKSA recommended that the publication of the RPI should cease and that, in the interim, RPI should be brought into line with CPIH (Consumer Prices Index, with housing costs). The Treasury and UKSA have since been consulting on the timing and technical details of these proposed changes.
We have now submitted our response to the consultation, in which we set out our reasons for opposing the planned changes:
- The RPI and CPIH, to which it would be aligned, have quite different purposes: CPIH is a macroeconomic indicator that is good for gauging the general performance of the economy, while RPI is intended to reflect changes in the cost of living. Using a macroeconomic indicator to reflect how prices are changing risks giving people a misleading impression of how prices are changing and undermining confidence in statistics.
- The UKSA is developing an alternative measure of the changing cost of living: the Household Costs Index (HCI). The RPI is much closer in purpose to the HCI than to the CPIH and it would make far more sense to focus on developing the HCI and taking that to ‘National Statistic’ status.
- The decision to align RPI with CPI has been made with unnecessary haste and without taking into account recommendations from either UKSA's stakeholder panel or the key report, Measuring Inflation (January 2019), from the House of Lords Economic Affairs Committee.
The RSS will continue to lobby and express our concern about these plans.