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Keeping it real

Date: 10. April 2013
Alex Hurrell

Trends in real wages under the new inflation measures

Last month’s ONS Consumer Price Inflation release for February 2013 included for the first time two new inflation index series, the RPIJ (1997-2012) and the CPIH (2005-2012). These new measures have been introduced in response to concerns with the current RPI and CPI measures respectively.

RPIJ  is a modified version of the RPI, based on a slightly different mathematical calculation. It has been developed in response to a recent review of RPI by the National Statistician that concluded that RPI did not meet international standards because of the formula it uses (known as the ‘Carli’) to calculate prices for certain items in the RPI consumption basket. The new RPIJ measure is identical to the RPI in terms of the items it covers but addresses these concerns by using an alternative calculation method where necessary (known as the geometric ‘Jevons’ formula).

 

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Inflation newspaper

The coalition's £11bn stealth cut

Date: 21. September 2011
James Plunkett and

This post originally appeared on the New Statesman blog

A technical quirk will allow the government to skim small amounts each year from lower income households.

What's the biggest cut George Osborne has made as Chancellor? Scroll through the Budget Red Book and the answer may surprise you. There's the removal of child benefit from higher rate taxpayers, clocking in at £2.5bn by the end of the parliament, and there's the time limiting of incapacity benefit which will save, eventually, around £1.2bn. But the biggest cut of all makes both moves look like minnows. It's the switch from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI) as the measure used to calculate tax credits, benefits and public service pensions.

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