Campaign success for the RSS with new Household Cost Indices

The ONS has begun the quarterly publication of the Household Cost Indices (HCIs) following a long campaign by the RSS for their development.  

Initially proposed by RSS fellows Jill Leyland and John Astin, the HCIs look to measure inflation as experienced by different households; unlike the Consumer Price Index (CPI), the main measure of inflation, they include interest payments such as mortgages and student loans. They also weight households equally, whereas the CPI gives greater weight to higher spend (usually higher income) households.  

The new figures published by ONS, covering up to September 2023, show that while the inflation rates shown by the CPI and the HCIs do not always differ, the CPI has underestimated household inflation during the cost-of-living crisis. The HCIs in particular have pointed to a higher rate of inflation for lower income households.   

Speaking to the Financial Times, RSS CEO Dr Sarah Cumbers said, “We hope the government takes note of today’s figures which show that inflation is higher, and hitting those with a mortgage and social renters the hardest.”  

In further comment to the BBC, prices expert for the RSS Jill Leyland said the new data “shows exactly why we’ve been pushing for development of the HCIs.” 

"CPI is fine for broader economic purposes but over the past two years, it has not reflected the true extent of the cost of living crisis”, she added.  

While the RSS is pleased to see the figures now published quarterly, we hope for further development in due course, as highlighted in a letter from RSS President Dr Andrew Garrett to National Statistician Sir Ian Diamond earlier this year. 

The RSS will be holding a hybrid event to discuss the HCIs on 12 December, in collaboration with the Resolution Foundation and Citizens Advice. Register to attend here. 

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