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The "real" rate of inflation: Daily Telegraph, 4 December 2006

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Daily Telegraph, 4 December 2006

The Daily Telegraph suggested that many groups in society were experiencing rises in the cost of living higher than those indicated by the official inflation figures. The National Statistician wrote to correct some errors and also to point out that individual households' experiences were bound to differ, as they all have differing patterns of expenditure.


Issue date: 04 December 2006
Type: Letter to the Press

Sir,

Your articles and editorial ("Revealed: the real rate of inflation", report, 4 December) contain factual errors which may have misled your readers. The Consumer Prices Index (CPI) does include gas and electricity bills and also school fees. Moreover, there is no such thing as the "real" rate of inflation - no two people's expenditure patterns will be the same and some households will experience higher inflation than the official figures and some will experience lower inflation.

Although the CPI excludes owner-occupier housing costs and council tax, the long-standing Retail Prices Index does include them. Both measures represent an average and both are given prominence in our releases.

Our inflation statistics are based on hard information. Each month we collect about 110,000 prices for over 650 goods and services in around 150 locations throughout the UK. The goods and services included are based on a survey of the purchasing habits of over 6,000 households to ensure that they reflect their relative importance, in terms of expenditure.

Yours faithfully,

Karen Dunnell
National Statistician
Office for National Statistics
1 Drummond Gate
London
SW1V 2QQ

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