Measuring prices across the economy

Measuring prices across the economy CPI is ONS’s current main measure of inflation, uses include: Inflation target European comparisons Deflator in the UK’s National Accounts Uprating pensions and benefits Johnson highlighted the benefits of maintaining a main measure of inflation Review recommendations: to move towards CPIH becoming the main measure consider making the case for legislation governing the production of CPIH

Consultation questions 1. Should ONS identify a main measure of price change across the economy? i. Yes. ii. No. 1a. Why? Please provide comments. If yes: 2. What should this measure be? i. the CPIH, as recommended in the Johnson review. The CPIH includes owner-occupiers' housing costs. It does not currently hold the National Statistics designation (although its re-assessment is due to commence shortly). The index is a UK measure, designed by ONS to meet UK needs. ii. the CPI, ONS's current headline measure. The CPI is an EU measure, designed by Eurostat to ensure comparable consumer prices statistics across the EU. iii. Other (please provide details). 2a. Why? Please provide comments. 3. Should its production be governed by legislation? 3a. Why? Please provide comments.

Measuring consumer price inflation for different household types

Measuring consumer price inflation for different household types The existing measures seek to understand how prices are changing across the economy Review Recommendations: Publish complementary indices that seek to understand the impact of changes in prices on household groups Make it clear to users the measures of income with which these should be compared Indices could be constructed on the basis of an existing measure (eg CPI) or by using a payments approach Insurance costs Higher education fees Housing costs

Consultation questions 4. Should ONS seek to measure changes in prices as experienced by different households? i. Yes. ii. No. 4a. Why? How often? Please provide comments. 5. If yes, how should ONS seek to do so? i. Using a payments-based approach. ii. On the same basis as existing measures such as CPI. iii. Via another means (please provide details) 5a. Why? Please provide comments.

The RPI

The RPI Authority position – “the methods used to produce the RPI are not consistent with international best practice and, consequently, that the series is not deserving of National Statistics accreditation” Review Recommendations: Re-state that the RPI is flawed Work towards ending the use of RPI as soon as practicable Consult users on discontinuing the sub-indices and analytical series based on the RPI Only changes that are necessary to ensure the continuation of the RPI should be made

Consultation questions 6. Do you use the following indices? i. RPIJ Yes/No ii. Tax and price Index Yes/No iii. RPIY Yes/No iv. RPI pensioner indices Yes/No v. Component indices of the RPI Yes/No vi. Any other RPI analytical- or sub-index Yes/No 6a. If yes, for what purposes? Please provide comments 7. Do you agree that the following indices should be discontinued? Any other RPI analytical- or sub-index Yes/No 7a. Why? Please provide comments. 8. Do you have any views on what ‘freezing’ changes to the RPI should mean in practice? Please provide comments.

Evolving consumer price statistics

Evolving consumer price statistics Importance of responding to evolving statistical needs, using innovative, efficient and effective methods Rapid changes in society and technology Big data has already been used by some organisations to develop daily consumer price indices Johnson review recommendation were wide ranging but included: Developing the use of scanner data and web scraping Treatment of discounts Outlet substitution Quality change Inclusion of Council Tax in CPIH

Consumer Price Statistics Workplan Short term Ensuring compliance with European regulations Producing CPI and CPIH to best possible standard Updating the sample frame for consumer price indices Developing indices for inflation as experienced by different households Developing experimental superlative indices Improving transparency and process

Consumer Price Statistics Workplan Long term Developing innovative, new, data sources Improving measurement of discounts Relative regional consumer price levels

Consultation questions 9. Are the priorities identified by ONS in its forward work plan appropriate? i. Yes. ii. No. 9a. Why? Please provide comments. 10. Should ONS include council tax in the CPIH? 10a. Why? Please provide comments.

Questions