New inflation measures launched

Two new measures of price inflation were launched by the Office for National Statistics (ONS) last month.

One of the new measures, CPIH, includes owner occupiers’ housing costs; their omission was a deficiency of the Consumer Prices Index (CPI).

The other new index is RPIJ, which is an “improved” variant of the Retail Prices Index (RPI).

The new measures are only classed as “experimental statistics” for the time being. An assessment of them is expected to be completed by this summer.

Meanwhile, the RPI is no longer recognised as an official statistic, although figures will still be produced.The ONS said the RPI would continue to be used by the government for long-term index-linking for gilts and bonds. And it is still being used as the basis for setting some pension payments.

The RPI also features in many multi-year pay deals negotiated by unions, so they will be keeping an eye on any attempts to change measures.

The latest annual percentage rises for the various measures cover the year to February and were: CPI — 2.8% (2.7% in January); CPIH — 2.6% (2.5%); RPI — 3.2% (3.3%); and RPIJ — 2.6% (2.7%).

For the time being, Labour Research will continue to publish the RPI and CPI inflation rates in Key Economic Indicators.