You are here: Home - News -

Axeing of RPI may lead to more base rate cuts

  • 28/07/2003
  • 0
Further Bank of England base rate cuts could be on the cards if the Treasury drops the Retail Price ...

Further Bank of England base rate cuts could be on the cards if the Treasury drops the Retail Price Index (RPI) as a measure of inflation, according to Inter Alliance. Gordon Brown has indicated that his department is looking to adopt the Harmonised Index of Consumer Prices (HICP) in lieu of the RPI.

Charles Ansdell, senior technical adviser at Inter Alliance, said: ‘The adoption of HICP will leave the way open for further interest rate cuts. HICP is much lower than our rate of inflation according to the RPI. This will give the Monetary Policy Committee more space to make interest rate cuts.’

He added: ‘The Treasury is talking of bringing this in as early as October, and almost certainly will, as it suits this country economically and it is part of the necessary economic alignment for us to join the euro.’

The HICP is the favoured measure in the euro zone. It does not include housing costs and smoothes out fluctuations in data. Last month the RPI inflation figure was 2.9%, a fall of 0.1%, but the HICP stood at 1.2% after removing the housing market.


There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.

Read previous post:
Recent results reflect growth in new lending

Sub-prime lender Kensington Group has more than doubled its new lending in the first half of this ye...