Statisticians question the switch to CPI for benefits uprating

The Financial Times reports that the Royal Statistical Society has questioned the government’s decision, announced in the June budget, to switch to the Consumer Price Index (CPI) in calculating benefits and state pension upratings.  

The government has estimated that the switch will generate savings of £5.8bn a year by 2014-15, as CPI tends to rise lower than other measures of inflation.  In a letter to the UK Statistics Authority, the Royal Statistics Society cautioned that the CPI “is not necessarily the best index for all purposes”.

Jill Leyland, from the RSS, labelled the move to CPI a “controversial change”, citing analysis by the Institute for Fiscal Studies which questioned whether the CPI was a good measure of living costs.

 See article on Financial Times website:

http://www.ft.com/cms/s/0/af0d6b70-b53a-11df-9af8-00144feabdc0.html