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Inflation Indicator

Volume 404: debated on Wednesday 30 April 2003

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To ask the Chancellor of the Exchequer if he will make a statement on (a) the progress and (b) the scope of the Treasury's review of the detailed implications of changing the indicator of inflation from RPIX to HICP; and whether the Treasury's review will consider the implications of replacing RPIX with an adapted version of HICP. [110235]

There are several measures of inflation published monthly by the ONS, including RPIX and HICP. The Chancellor made clear in his Budget statement that the Treasury would continue to examine the detailed implications of adopting the HICP. The Government intends that measures of inflation based on the RPI will continue to be published.

To ask the Chancellor of the Exchequer if he will make a statement on the (a) current and (b) future use of the Harmonised Index of Consumer Prices as a measure of inflation in the United Kingdom. [110233]

The Chancellor said in his Budget statement that the Treasury would continue to examine the detailed implications of changing the inflation target to an HICP basis. He reaffirmed the symmetrical inflation target based on the current RPIX measure for this financial year of 2.5 per cent.

To ask the Chancellor of the Exchequer what contingency plans he has to adjust the inflation target for the Monetary Policy Committee in the event of a move from RPIX to HICP. [110234]

The Chancellor reaffirmed the inflation target for this financial year at 2.5 per cent. on the current RPIX measure.

To ask the Chancellor of the Exchequer what recent discussions officials from his Department have had with representatives of (a) the European Union, (b) EU member states and (c) the European Central Bank regarding a possible change from using RPIX as the indicator of inflation to using HICP. [110237]

While Treasury officials have regular discussions with counterparts in the European Commission, other member states and the European Central Bank on a wide range of issues, the Bank of England Act (1998) gives the Treasury responsibility for specifying what price stability is taken to consist of in relation to the monetary policy objectives of the Bank of England.