Monetary Policy

ONS’s inflation measurement is changing, but the outcome may be unexpected

Julian Jessop writes for The Spectator

Julian Jessop, IEA Economics Fellow, has written for The Spectator on the ONS’s decision to change the way inflation is measured. From Friday, ONS inflation figures will include a breakdown of how different households have been affected, based on housing tenure, retirement status, expenditure and number of children.

However, Julian points out that this socio-economic breakdown is not new, but rather is a continuation of how ONS measured inflation prior to February 2020.

Further, Julian also comments on the predictions of some that this renewed inflation measurement will demonstrate the greater extent to which poorer families have been impacted.

“There is a widespread assumption that recent inflation has hit poorer households worse, mainly because they spend a larger proportion of their income on food and, especially, domestic energy bills. Friday’s data will shed more light on this.”

Read the full article here.