Re: HICP, RPIX & interest rates

Jul 12, 2003 0 Replies


contrast, RPIX includes a measure of housing depreciation, which is


> linked to house price inflation, as well as Council Tax. With annual
> house price inflation currently running at close to 20% and Council
> Tax up 12% from a year ago, these two components combined currently
> contribute more than one percentage point to the annual RPIX

I'm not clear what it means to say that depreciation is "linked to" house price inflation. Depreciation should presumably be a measure of maintenance costs, so if anything it should be linked to building costs rather than house prices themselves - although it isn't obvious why they can't measure such costs directly.

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