UK to adopt CPIH as preferred inflation measure in March 2017

Shoppers cross the road in Oxford Street, in London, Britain August 14, 2016. REUTERS/Peter Nicholls

LONDON (Reuters) - Britain’s Office for National Statistics (ONS) said on Thursday it intends to begin using CPIH as its preferred gauge of British inflation, a measure that includes more housing costs, from March 2017.

The ONS first published CPIH as an official statistic in 2013 but the body which supervises the ONS said in 2014 that it fell below acceptable quality standards.

“We intend to make CPIH the preferred measure from March 2017, by which time all the planned improvements will have been implemented,” said John Pullinger, national statistician and ONS chief executive.

CPIH does not measure house prices or mortgage payments, but instead estimates how much a home-owner would pay to rent their own home. It will also include council tax, a local property levy.

Annual inflation rates measured by CPI and CPIH have generally been similar. In September they stood at 1.0 percent and 1.2 percent, respectively.

Reporting by Andy Bruce; editing by Stephen Addison