The Isle of Man Government will change the way in which the Retail Price Index (RPI) measure of inflation is calculated.
Currently, the Government calculates three measures of inflation – RPI, using the Carli formula, and the Consumer Price Index (CPI) and RPI (Jevons), both using the Jevons formula.
From April 2018, the Government will publish only two measures of inflation in economic statistics: CPI, used by the Bank of England and the UK Government as the main measure of inflation, and RPI.
However, RPI will then be calculated using the Jevons formula.
The Carli formula overstates the effects of price changes. The Jevons formula is more robust.
Minister for Policy and Reform Chris Thomas MHK said:
‘Ultimately, no two people experience the same inflation as they consume different goods and services.
‘In 2019, after we have conducted the Household Income and Expenditure Survey, it should be possible for us to calculate separate inflation indices for different sectors of our population such as pensioners and low income groups.’