LORDS

New inquiry launched into use of RPI as a measure of inflation

12 June 2018

The Economic Affairs Committee launches its short inquiry into the use of RPI with two evidence sessions. Witnesses will be asked if we should stop using the Retail Price Index (RPI) as a measure of inflation, what reasons are there for keeping it, and what impact would changing RPI have on the people and organisations who use it.

Background to the inquiry

Following comments to the Committee by the Governor of the Bank of England in January 2018 that it may be time to transition away from using the retail price index (RPI), as referred to in the Committee's most recent report, Treating Students Fairly: The Economics of Post-School Education, the Economic Affairs Committee of the House of Lords is conducting a short inquiry into the use of RPI. It will conclude before the summer recess.

Witnesses

Tuesday 12 June in Committee Room 1, Palace of Westminster
At 3.35pm

  • Chris Giles, Economics Editor at the Financial Times
  • Paul Johnson, Director of the Institute for Fiscal Studies (IFS)

At 4.35 pm

  • Jonathon Athow, Deputy National Statistician and Director General for Economic Statistics at the Office for National Statistics (ONS)
  • Sir David Norgrove, Chair of the UK Statistics Authority (UKSA)

Likely questions

  • What are the differences between how RPI and CPI are calculated?

  • What are the arguments against scrapping RPI altogether?

  • How much could the Government save in reduced debt interest payments if it switched index-linked gilts onto CPI?

  • Do you agree with the Chancellor of the Exchequer that moving from RPI to CPI will have a physical cost and will shift the burden of taxation between different groups of taxpayers? Who will be the winners, and who will lose out?

  • Why do you think RPI is "a poor measure of inflation"?

  • In the ONS's March 2018 paper on RPI, the National Statistician said that a reason for not changing RPI was that some users valued the continuity of the index, despite its flaws. Can you explain why you think it is more important for a statistic to be consistent than correct

  • Can you explain the process for making changes to RPI?

  • What would you like to see happen to RPI?

Further information

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