ONS has created ‘alphabet soup’ of inflation measures, resulting in more problems than solutions – ITEM Club

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Andrew Goodwin, senior economic advisor to the EY ITEM Club, comments on today's inflation announcement by the ONS:

“The ONS was stuck between a rock and a hard place on this one and the conclusion that it has come to is a real fudge which doesn’t solve anything. The methodology behind the calculation of RPI is fatally flawed and though the initial upheaval associated with a change would have been challenging, it would have taken us to a much more satisfactory place in the long run.
 
“We’re now left with a real alphabet soup of different inflation measures – we were already getting one new measure in March, CPIH, but now we also get RPIJ to go alongside RPI, RPIX, RPIY, CPI and TPI. What was already a mess has now become messier.”