CPI is not good enough to gauge inflation, says RSS

OFFICIAL statistics place too much weight on the consumer price index (CPI) as an inflation measure, according to the Royal Statistical Society (RSS).

The group said downplaying the Retail Price Index in favour of CPI, which is used widely across Europe, fails to take national needs into account.

The coalition government said in June it would start pricing benefits on the CPI from next April, in a move likely to save billions of pounds due to its traditionally lower rate.

“Giving prominence to CPI ahead of other indices means that users are implicitly being
encouraged to use it for purposes, such as wage negotiations, for which it is not ideal,” the society wrote in a letter to the parent body of the Office of National Statistics.

“We do not feel that CPI should have sole star billing in this way.”