I spoke at an event about the Retail Prices Index (RPI) last week and made three points – that there is a misunderstanding about the formula effect, ONS is too influenced by economists’ ‘group think’ and weaknesses in governance. These can all be resolved easily, returning RPI to full use, if ONS and UKSA wants to. It was widely agreed that “the mess” had to be sorted out, and as the RPI cannot be killed off some modest changes to it are required. Continue reading The truth about the RPI – some brief comments
Can the Retail Prices Index be killed off? Should it be killed off and, if so, for what reason? Or is reform needed? A meeting is coming up (at the RSS in London, on 13 June, book here) to discuss the future of the RPI and the changes needed to all consumer price measures to keep them fit for purpose. Why not come and hear the views of John Pullinger, the UK’s National Statistician, and other experts?
The RPI has recently been subjected to a sustained bout of unfair criticism from politicians and commentators. Despite this, the judge in the recent BT pensions case deemed that the RPI had not “become inappropriate” and that BT had no grounds for moving a group of their pensioners to the CPI which gives generally lower upratings. The RPI is, therefore, still fit for purpose. This was a relief to me – I was the expert witness arguing in favour of the RPI – if not a surprise. The full story as to how we got to the situation where so many people (mostly, it must be said, economists and the powerful and self-interested trying to cut their costs) are doing the RPI down is yet to be told. The decision was important for the pensioners as their incomes would not be unjustifiably cut. It was also a good day for common sense, and for the RPI, one of the country’s longest-standing, most trusted and widely-used statistics. The Thales and BT rulings taken together provide food for thought for those who continue to damage the reputation of the RPI without looking beyond the mantras and sloppy headlines. Continue reading RPI: Still fit for purpose
Those broadsheets that wanted to “remain” are looking for every scrap of bad news following the Brexit vote. For many stories it seems fair enough, newspapers always have their own take on events. Surely though, it’s a step too far when the reporting of official statistics “facts” falls below a certain threshold of quality, deliberately. Such was some of the reporting of Tuesday’s inflation figures. More reporting of events (and less speculation), a bit of perspective (not focusing on the latest month’s figures) and looking at the detail of the release would be good. Continue reading “Inflation soars” OMG
The recent political coming and goings (the EU referendum, the arrival of a new Prime Minster and Labour’s travails) has seen a period of unusual attitudes to facts. More people seemingly want information and yet the (accurate) use of facts by politicians, some elements of the media and quite a few people has fallen to new lows. Experts are being rubbished, institutions’ reputations are being damaged, and the media is accused of being biased, prompting discussion of a post-truth society. There is much talk of a fractured Britain as technology and globalisation have hastened economic disruption affecting many livelihoods.
This note sets out a few steps – go local, kill the average, be open, do good research, un-spin and tell good stories – that the statistics world might take to help people reconnect with reality and help policy makers understand what might be needed if we are to establish a more sensible approach to debate and policy. It has much in common with the Data Manifesto published by the Royal Statistical Society two years ago. Continue reading Post-truth, post-Brexit statistics
Gordon Brown and Ed Balls, architects of the pre-2007 mantra of “no return to boom and bust“, have left Parliament, and the contenders for the Labour leadership are busily reinventing their economic policy, so it’s only appropriate that the latest statistics reinvent the economic history! The figures show that the boom and bust were both greater than previously thought. And not for the first time! Continue reading Even bigger boom and bust!
According to the Evening Standard today, the Bank of England’s growth forecast has been slashed and the inflation forecast is little changed. The former has been cut by 0.3 percentage points in 2016 and the latter by 0.4 points. Umm. Surely if 0.3 is slashed, 0.4 can’t be little changed. Continue reading “slashed” = “little changed”
- Contrary to public perceptions most workers (and hard working families) are not suffering a cost of living crisis as often claimed in political debate.
- The source of this widespread misconception is the national statistics which are deficient in this key area
- A failure to properly allow for the, so-called, composition effect in earnings gives a very misleading impression and puts a huge question mark over the election’s key economic statistic
- ONS commentary fails the “true and fair” test – publications are hard to find and do not explain what the figures really show
- The standard comparison does not use the best measure of earnings and uses the wrong measure of inflation
- Many of the huge number of newly created jobs are low paid so aggregate earnings in the economy are growing slowly but most workers (about 85%) are seeing very healthy real terms growth in their wages as they stay in the same job from one year to the next.
- As the numbers are hard to find and poorly explained, politicians and others deliberately take advantage of the confusion and skew public perceptions.
- The statistics board (UKSA) has ignored the issue. It is time to do its job properly.