- The Office for National Statistics (ONS) has published its latest report on UK inflation as measured by the Consumer Prices Index (CPI) and the Retail Prices Index (RPI).
- The Consumer Prices Index (CPI) annual inflation stands at 2.7 per cent in October 2012, up from 2.2 per cent in September. ONS states that the main upward pressure came from the education sector (university tuition fees) with smaller upward contributions from food & non-alcoholic beverages and transport. These were partially offset by downward pressures from the housing & household services, recreation and miscellaneous goods & services sectors. The CPI stands at 124.2 in October 2012 based on 2005=100
- The Retail Prices Index (RPI) annual inflation stands at 3.2 per cent in October 2012, up from 2.6 per cent in September. ONS states that the largest upward pressure came from university tuition fees, followed by food and housing. Fuel & light provided the largest downward pressure. The RPI stands at 245.6 in October 2012 based on January 1987 = 100
- The ONS also comments that on 8 October, the National Statistician launched a consultation inviting views on options for amending the way the RPI is constructed at the lowest level of aggregation. The consultation also includes a proposal to change the way private housing rental prices are measured in the RPI and CPI through the use of a new data source. The consultation closes on 30 November.
- On 2 November, the ONS announced that a new additional measure of consumer price inflation will be launched which includes owner occupiers’ housing (OOH) costs. The new index, which will initially be known as CPIH, will measure OOH costs using a particular calculation method – the rental equivalence method. This method uses changes in rental prices to measure the costs of owning, living in and maintaining a property. ONS stated that the CPIH will be introduced in March 2013 at the same time as the annual CPI/RPI basket of goods and services review. ONS published its full response to the public consultation on OOH on 13 November 2012.
For reference, SewellbrydenGunn’s (SBG) Update to Economic Assumptions Autumn 2011 can be accessed via the protected link here.
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