August 8, 2019 / 5:28 PM / 10 days ago

UK statisticians find errors in RPI index used for bond payments

FILE PHOTO: Shoppers browse aisles in a supermarket in London, Britain April 11, 2017. REUTERS/Neil Hall/File Photo

LONDON (Reuters) - Britain’s statisticians said on Thursday they had found errors in the weighting of different goods in the basket of items used in the retail prices index of inflation that underpins payments on the country’s inflation-linked government bonds.

March’s rate of RPI inflation should have been 2.5% rather than 2.4%, while June’s RPI rate should have been 2.8% rather than 2.9%, the Office for National Statistics said.

Unlike other British statistics, RPI is not corrected retrospectively, but the discovery of the error will lead to a discontinuity between the level of the RPI index in June’s data and that in the next release, which covers July.

RPI is widely used in commercial contracts and some wage bargaining, as well as for British government bonds, though the ONS has said for several years that it no longer gives an accurate measure of inflation.

The separate consumer prices index of inflation, which is targeted by the Bank of England, was not affected by the error, the ONS said.

Reporting by David Milliken; editing by Stephen Addison

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