Tony Dent to Ed Humpherson: Household Costs Indices

Dear Ed,

Following the publication of the quarterly HCI’s on 5th December, I attended Tuesday’s informative discussion on those measures, as hosted by the Royal Statistical Society in collaboration with the Resolution Foundation; where the event was held. Almost universally the HCI’s were welcomed by the various speakers, including Paul Lewis, the journalist and broadcaster and Morgan Wild of Citizen’s Advice.

There is an evident demand for these statistics to be published monthly alongside the CPI, rather than quarterly as currently proposed. There is also interest in when they may be considered for National Statistics status. Although such issues are not under your direct control, Better Statistics are interested to understand if there are any discussions in progress as to when such status might be considered? In our opinion the HCI’s are a clear example of the better statistics we seek!

The position is somewhat compromised by the evident inadequacies of the CPIH, which is presently subject to considerable adjustment to correct for inaccurate rents data. This latter has served to re-ignite the controversy created by selecting ‘rental equivalence’ to measure inflation as experienced by owner occupiers. As evidenced by the recent errors, replacing the robust calculation of the costs actually experienced by owner occupiers with the less than robust rental costs of a fabricated ‘measure’ is not appropriate. I am sure you are aware that the recent amendments to CPIH have created widespread comment, for example, the Twitter handle @TUCeconomics recently posted “ONS ‘what if’ calculations suggest CPIH might have been 0.5 percentage points higher in recent months.” Further comments on this matter were recently posted by Shaun Richards on the Stats User Net – please see The ONS View on owner-occupied housing is in disarray.

We therefore echo Shaun Richards’ comment at the end of his post that, surely, the National Statistics status must now be removed from the CPIH? Do you have plans to reconsider that status?

In closing, I wish you and all at the OSR a Merry Christmas and Happy New Year. Whatever may happen as a result of the UKSA review, I hope we might have the opportunity for further discussion on the Code of Practice in the New Year. That is the key to ensuring badly needed improvement across all of our statistics.

With all good wishes,

Tony Dent,