The ONS (Office for National Statistics) stated that it will be well positioned to amend its monthly statement regarding price increases by the end of 2016.
It would give prominence to a measure called CPIH, which has tended to show the cost of living rising faster.
The Consumer Prices index, or CPI, is used for the Bank of England’s 2{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} inflation target and is used across Europe to show how quickly prices in the retail sector and elsewhere have been rising or falling in different countries.
But while it reflects changes in rents, it does not show how families are affected by the rising cost of being owner-occupiers.
CPIH does not specifically include property prices or mortgages. Instead, statisticians adjust the rate by estimating how much it would cost owners to rent their own homes.
But as a result the broader measure has been 0.3{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} higher for most of the last year. In January CPI was 0.3{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34}, while CPIH was 0.6{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34}.
The ONS has provided assurances that the CPIH will now be more accurate and reliable, after it faced criticism for not being robust enough and lost its status as a National Statistic.
However, even if it becomes the headline inflation figure around the turn of the year, there seems little prospect that the Chancellor will direct the Bank of England to use it for the UK’s inflation target any time soon.