RPI/CPI User Group

last person joined: 15 days ago 

To foster co-operation and the exchange of information between the ONS, its advisory bodies and other users. Please see 'Aims of the RPI/CPI User Group' in the library for further details.

Report on incorporating OOHPI into the HICP

  • 1.  Report on incorporating OOHPI into the HICP

    Posted 6 days ago

    The Eurostat report on incorporating an OOHPI component in the HICP was released on Monday, December 3:
    http://data.consilium.europa.eu/doc/document/ST-15112-2018-INIT/en/pdf

    Due by December 31, it was received by the Secretary-General of the Council of the European Union on November 29.

    The decision made is, of course, most unsatisfactory. I would hope that John Astin, who was head of price statistics for Eurostat for many years, would give us his own evaluation of the report. I may provide my own comments later.

    Prior to the Brexit referendum and even after it, there was always the possibility that the Bank of England's target inflation indicator would be changed in a fundamental way through the back door. Eurostat would rule that OOHPI would have to be part of the HICP by 202? Since the UK CPI is just the UK HICP, housing prices would re-enter the Bank of England's target inflation indicator not because of a change in the remit from the Chancellor of the Exchequer. Now, while that might still happen, the probability it will has shrunken almost to the infinitesimal. Arguably, that's not such a bad thing. That wouldn't have been a very democratic way to make such a fundamental reform. In any case, the UK can't count on Eurostat to save it from future housing bubbles. Britain must save herself by her exertions, and will, as I trust, save Europe by her example.