Letter: Retail Prices Index does its job well

Sir: We were concerned about Hamish McRae's commentary on the recent report by S G Warburg ('It's a buyer's market - and going down', 7 April). Mr McRae repeats many of its comments about the Retail Prices Index (RPI) but nowhere does he acknowledge the authors' overall conclusion that the RPI does its job reasonably well and better than its counterparts in many other countries.

The RPI, which we compile at the Central Statistical Office (CSO), carefully follows the recommendations of the RPI Advisory Committee, which includes eminent experts and key users representing a wide range of interests including those of employers, trade unions, government, business and finance, consumers, pensioners and academics. Following the committee's guidelines, the RPI is concerned with maintaining a consistent comparison from month to month of prices of a representative fixed 'basket' of goods and services bought by most households throughout the country.

The calculations are reviewed every year to keep abreast of changes in spending patterns. We are concerned with measuring the average price changes experienced by consumers for products of unchanged quality rather than with calculating the cost of the cheapest bargain basket at any point in time.

The CSO attaches great importance to maintaining high standards for the quality of the RPI. We have a keen interest in potential improvements to our methods and are receptive to comments. However, it is quite wrong to conclude that the RPI is misleading by not taking account of, for example, bargains found from bartering in the high street and travelling to Calais for cheap drinks, or the growth in shoplifting.

Yours faithfully,

JULIAN CALDER

Central Statistical Office

London, SW1

13 April

The writer is head of the Government Statistical Service.