As expected, the government is consulting on proposals for reform of the Retail Prices Index (RPI), potentially before 2030.
For context, the UK Statistics Authority (UKSA) had proposed that publication of RPI be stopped and that in the meantime it should be changed so that it is aligned with the Consumer Prices Index including owner-occupied housing costs (CPIH). Under current legislation, the UKSA is able to make the alignment change unilaterally from 2030, when the last relevant index-linked gilts mature; before then, the Chancellor's consent is needed because such a step would (as confirmed by the Bank of England in accordance with a statutory requirement) be both "fundamental and materially detrimental" to the holders of those index-linked gilts. The government agrees that reform is needed. It has, however, rejected the UKSA's proposal that publication of RPI be stopped. As regards aligning RPI with the CPIH formula, the government takes the view that this cannot be done soon due to the impact on gilt holders and the gilt market.
The consultation announced today is on whether to make the change before 2030, though not before 2025, and on technical issues. It also asks about wider economic consequences, though these cannot be considered by the Chancellor when deciding whether or not to consent to the alignment change being made earlier than 2030. There is no mention of compensation for adversely affected parties.
The government said previously that it has no current plans to stop issuing gilts linked to RPI (or, by implication, to start issuing gilts linked to CPI or CPIH).
The consultation closes on 22 April and there will be a government response before Parliament's summer recess.