MSE News: RPI measure of inflation to remain

"RPI, which is linked to retirement income and other investments, should remain unchanged says the national statistician..."

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  • Paul_HerringPaul_Herring Forumite
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    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • kidmugsykidmugsy Forumite
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    "should remain unchanged": I should bloody well hope so.
    Free the dunston one next time too.
  • woolly_wombatwoolly_wombat Forumite
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    The RPI has been downgraded.:shocked:

    Here's what Ros Altmann had to say:
    http://www.rosaltmann.com/pdf/RPI-ONS_says_no_longer_National_Statistics_18_Mar_2013.pdf

    "ONS decision to downgrade RPI was kept very quiet: Last week, the ONS quietly downgraded the Retail Prices Index, RPI - our traditional long-standing measure of inflation, on which many incomes and prices depend. A statement, hardly noticed by anyone, said it had decided the RPI would no longer be an official statistic. There was no widely disseminated press release or publicity."

    From the Office for National Statistics website:
    http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/february-2013/stb---consumer-price-indices---february-2013.html

    "As pre-announced by the National Statistician, ONS is launching two new measures of consumer price inflation alongside the Consumer Prices Index (CPI) for the first time this month; CPIH includes owner occupiers’ housing costs and RPIJ is an improved variant of the Retail Prices Index (RPI) calculated using formulae that meet international standards. CPIH and RPIJ are currently designated as experimental statistics and are being assessed for National Statistics status.

    While ONS will continue to publish the RPI every month, its designation as a National Statistic has been cancelled. Please see background note 1 for more details.

    The Consumer Prices Index (CPI) grew by 2.8% in the year to February 2013, up from 2.7% in January 2013. The change in the rate follows four consecutive months when it stood at 2.7%.

    The largest upward contributions to the CPI came from the expected increases in many gas and electricity bills and from price changes for some recreational goods, motor fuels and air transport.

    The largest downward contributions came from smaller price increases for food and soft drinks than a year ago and price falls for alcohol compared with price rises a year ago.

    CPIH, the new measure of consumer price inflation including owner occupiers’ housing costs, grew by 2.6% in the year to February 2013, up from 2.5% in January."


    So the new 'experimental' index, CPIH, gives an even lower annual rate of inflation than CPI.:(

    Well I never!

    WW
  • StevieJStevieJ Forumite
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    I wonder when they will be creating the RPIP (RPI for pensioners), an index to more accurately reflect pensioner inflation, the 12th of Never would be my guess.
    Woolly thanks for that, you can't trust these people can you icon9.gif
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  • CPI in September is the important one, if we're looking at pension increases... expect it to be lower than it is up until then.
  • woolly_wombatwoolly_wombat Forumite
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    mania112 wrote: »
    CPI in September is the important one, if we're looking at pension increases... expect it to be lower than it is up until then.

    At the moment, yes.

    But Towers Watson are speculating that this could change:
    http://www.towerswatson.com/en/Press/2013/03/Two-new-inflation-measures-will-either-be-used-for-pensions

    "Two new inflation measures – will either be used for pensions?

    LONDON, Monday 18 March 2013 – Two new price indices to be published for the first time tomorrow, along with the decision that Retail Prices Index (RPI) numbers will no longer be designated as National Statistics, add to the uncertainty over how some defined benefit pensions will be increased in future, according to Towers Watson, a leading global professional services company."

    "The Government has previously said that it would consider whether to base some pension increases on CPIH inflation rather than on CPI inflation once CPIH became available. Last week, the ONS said that throughout the seven years to 2012 CPIH inflation was always lower than or the same as CPI inflation. It was on average been 0.2 per cent lower and this was also the gap at the end of 2012."

    The National Pensioners Convention website is drawing attention to RPI Action Day - 8 April 2013:
    http://npcuk.org/1184

    "to highlight the impact that the removal of the RPI is having on pensioners’ income and to call for its reintroduction. We are therefore calling on supporters to send a model letter either by email or post to their local MP on the day (or to see them in their surgery that week)."

    A copy of the model letter can be downloaded from the website.

    Alternatively I suppose we could all just do nothing and, by implication, send the message that changing the inflation index applied to pensions (past or future) is OK!;)

    WW
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