Meh. There’s no single real rate of inflation. Different methods of measuring inflation have their pros and cons.
Meanwhile, neither RPI or CPI try to track increases in the cost of living.
Meanwhile, neither RPI or CPI try to track increases in the cost of living.
This works well in ensuring the government can achieve its primary aim which is to transfer all surplus worker productivity to wealthy pensioners.
I'm not sure about the intent though. When the government first announced COVID benefits it was quickly revealed that they had no understanding what most vulnerable members of society were facing. It took several rounds of announcements until everyone was satisfied.
Likewise, the article's comment about pay increases for public sector employees made me cringe. At least on this side of the pond, the public sector has been hit hard and is in chaos since pay is based upon union contracts that were pre-pandemic. In some cases, union contracts expired early in the pandemic but where negotiations were stalled until recently due to the pandemic.
https://en.wikipedia.org/wiki/Inequality_of_arithmetic_and_g...
https://web.archive.org/web/20101214034940/http://www.statis...
They don't? What are they tracking then?
You can argue that it is or isn't doing a good enough job in terms of the choices made but that's specifically what it's doing (and while it may not be doing it well enough, it obviously does need to be done based on sampling not based on producing an exact % for each individual that the things they bought over the past year have increased).
(You're not the person who wrote "neither RPI or CPI try to track increases in the cost of living", but that's the context of this comment chain.)
RPI/CPI aren’t only tracking the prices paid, but also the quality of goods exchanged. For example, TVs used to be bulky boxes, with a small, low res, black and white screen. These days they are flat and high res with a large colour screen. They’re better TVs. So part of the price difference between TVs now and TVs in the 1950s is that money is worth less, but some of it is that TVs are better. If you’re interested in tracking how much your currency is worth less these days, you need to compensate for this.
On the other hand, if you want to buy a bottom of the range TV… you can’t buy a small bulky black and white TV these days. You’re going to buy a more expensive colour flat screen, and ok it’s better, but it’s also costing you more.
(This also applies to fridges, freezers, washing machines etc.)
Tldr RPI/CPI track changes in the value of money, and understate changes in the cost of living due to quality improvements in the goods people buy.