The UK is introducing a different measure of inflation to better reflect everyday price changes which will include the cost of owning a home.
The measure, called CPIH, adds changes to the cost of owning a home to other price changes tracked in the Consumer Price Index or CPI.
The Office for National Statistics said it would become the preferred measure of inflation from March, 2017.
The change is likely to show inflation is higher than currently indicated.
However, the Treasury has no plans currently to start using CPIH to uprate benefits, tax thresholds or other payments.
Although the Consumer Price Index does include the cost of renting and running a home, it leaves out special costs faced by property owners.
CPIH includes what are called the "costs of housing services associated with owning, maintaining and living in one's own home".
Rather than tracking the cost of a mortgage, statisticians estimate what it would cost homeowners to rent the property they live in.
There is also an element for what we pay in Council Tax.
Interest rates
The result is usually a higher figure for overall inflation, average annual price rises are 1.2% in the most recent calculation compared with 1% CPI.
In the long run, changing the preferred measure could have important implications for incomes and the economy.
For one thing, the Bank of England's Monetary Policy Committee sets its base interest rate with reference to a 2% CPI target.
So a different inflation measure which was consistently higher could lead to interest rates being kept higher as well.
 
The UK is introducing a different measure of inflation to better reflect everyday price changes which will include the cost of owning a home.The measure, called CPIH, adds changes to the cost of owning a home to other price changes tracked in the Consumer Price Index or CPI.The Office for National Statistics said it would become the preferred measure of inflation from March, 2017.The change is likely to show inflation is higher than currently indicated.However, the Treasury has no plans currently to start using CPIH to uprate benefits, tax thresholds or other payments.Although the Consumer Price Index does include the cost of renting and running a home, it leaves out special costs faced by property owners.CPIH includes what are called the "costs of housing services associated with owning, maintaining and living in one's own home".Rather than tracking the cost of a mortgage, statisticians estimate what it would cost homeowners to rent the property they live in.There is also an element for what we pay in Council Tax.Interest ratesThe result is usually a higher figure for overall inflation, average annual price rises are 1.2% in the most recent calculation compared with 1% CPI.In the long run, changing the preferred measure could have important implications for incomes and the economy.For one thing, the Bank of England's Monetary Policy Committee sets its base interest rate with reference to a 2% CPI target.So a different inflation measure which was consistently higher could lead to interest rates being kept higher as well.
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