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'Strong case' for abandoning CPI | 'Strong case' for abandoning CPI |
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There is a strong case for abandoning the Consumer Prices Index (CPI) as the headline measure of inflation, according to Institute for Fiscal Studies head Paul Johnson. | |
He was commissioned to review the measures of inflation for the UK Statistics Authority (UKSA). | |
Mr Johnson suggests replacing CPI with CPIH, a measure that includes owner occupiers' housing costs. | Mr Johnson suggests replacing CPI with CPIH, a measure that includes owner occupiers' housing costs. |
His recommendations are not binding on the government or the UKSA. | |
The authority is now expected to launch a consultation on the report and respond to it later in the year. | |
Mr Johnson also suggests that the government should move away from using the Retail Prices Index (RPI) for any reason as soon as possible. | |
It is currently used to determine how much regulated train fares can rise as well as the interest paid on some government bonds. | |
In the most recent set of inflation figures, CPI and CPIH both showed inflation rising by 1.0%. | In the most recent set of inflation figures, CPI and CPIH both showed inflation rising by 1.0%. |
But CPIH currently has its designation as a national statistic suspended because of concerns about the way it is calculated. |