-National Statistician To Announce Decision On Jan 10 0700GMT
LONDON (MNI) – The UK’s Office for National Statistics has today
announced the timetable for the decision process on improving the Retail
Prices Index.
Earlier this year the Consumer Prices Advisory Committee, which has
examined whether the RPI can be improved, published a report on
possible reforms to the method by which the RPI is calculated.
The ONS said that the ensuing public consultation resulted in over
400 responses from a wide range of organisations, including trade
unions, pension groups and private businesses.
Consequently, on 8 January 2013, the Consumer Prices Advisory
Committee (CPAC) will meet to discuss ONS’s response to the issues
raised in the consultation. CPAC will consider the statistical points
raised by respondents and ONS’s reply to them and provide advice to the
National Statistician.
The National Statistician will announce her recommendation at
0700GMT on 10 January 2013.
If the National Statistician decides to accept a recommendation
from the ONS to change the RPI methodology, the UK Statistical Authority
would then need to consult the Bank of England as to whether it judged
the change to be “fundamentally and materially detrimental to the
holders of index-linked gilts”.
Should the Bank rule that this was the case, then the UKSA would
need to seek the consent of the Chancellor before implementing any
change to the RPI.
Any changes to the way in which the UK Retail Price Index is
calculated could generate significant savings on the UK’s debt service
payments on index-linked gilts.
RPI is typically 0.5-1.0 percentage points higher than CPI, in part
due to the different formula for calculating it as well as the fact that
the index comprises a slightly different basket of goods.
Michael Saunders, UK economist at Citi Bank has estimated that the
changes to the RPI index could potentially save the UK government around
stg3bn in FY2013-14.
–London newsroom 0044 207 862 7491; email:ukeditorial@marketnews.com
[TOPICS: M$B$$$,M$$BE$]
