The Office for National Statistics (ONS) is changing the way in which it calculates Retail Price Inflation (RPI) in an attempt to reflect the cost of housing more realistically.
When applied retrospectively the move drastically alters the inflationary landscape to date. According to the ONS, using the old mortgage figures, RPI deflation last April stood at 1.2%. Using the new measure, it would have stood at a positive 0.2%. RPI is used to determine a huge range of pricing, including public sector pay, index-linked gilts and the State Pension. It measures a basket of goods including mortgage interest, council tax and certain other housing costs to give a measure of the cost of living. In the past, the mortgage interest calculation was based on all borrow...
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