Here in the UK we have a measure of inflation called the RPI (Retail Price
Index). This includes housing costs because ... the vast majority of people
don't own their homes outright. It used to be what was used to measure
'inflation'.
In 1997 the government set targets for Inflation using RPIX
(which excludes mortgage interest). Almost always RPIX is lower than RPI. In
2003 the government switched to using CPI (Consumer Price Index) which, like
RPIX, excludes mortgage interest, but because of a difference in the maths used
CPI is normally lower than RPIX.
Twice the government has effective lied to us about inflation. RPI is a
better measure for most UK households. Lies, damned lies and inflation
statistics - hiding the real fall in living standards for the majority in the
UK. We shouldn’t be fooled by this shabby switch.
Ex-Prime Minister's pensions are linked to RPI, so they don’t live by their
own rules, and with Director's pay up 50% this year the difference between CPI
and RPI doesn’t really matter to a few. We should insist that RPI is used as the more realistic measure.
