The government and UK Statistics Authority (UKSA) have
published the response to their joint consultation on the
timing of the reform to the Retail Prices Index (RPI). As
announced in September 2019, UKSA intends to bring the
methods and data sources of the Consumer Prices Index
including owner occupiers’ housing costs (CPIH) into RPI.
Owing to the use of RPI in two specific index-linked gilts,
this proposal would require the consent of the Chancellor
if it were to be implemented before 2030.
The Chancellor has announced that while he sees the
statistical arguments of UKSA’s intended approach to
reform, in order to minimise the impact of reform on the
holders of index-linked gilts, he will be unable to offer
his consent to the implementation of such a proposal before
the maturity of the final specific index-linked gilt in
2030.
It is UKSA policy to address the shortcomings of RPI in
full at the earliest practical time. The change proposed
can legally and practically be made by UKSA in February
2030.
The government and UKSA published the response to the
consultation alongside the Spending Review on 25 November
2020. See below for the consultation response document and
an exchange of letters between the Chancellor, the UKSA
Chair, the Governor of the Bank of England, and the Deputy
Governor for Monetary Policy of the Bank of England, which
details the outcome of the consultation.
The responses to the consultation have now been published
(on 28 January 2021). The responses can be found in the zip
file above.
