Choosing an inflation index: RPI, CPI and regulated utilities
The choice of inflation index is important in a number of public policy contexts, including inflation targeting, indexation of social security benefits, and regulation of utilities. Tim Tutton, Senior Adviser at Oxera, discusses the relative merits of the different measures of consumer price inflation used in the UK (the Retail Prices Index and the Consumer Prices Index), and asks what effects they might have in their different applications and on utility price controls.
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