ONS estimates that changes to duties announced in the April 2009 Budget would add 0.25 percentage points to the one-month change in the Consumer Prices Index (CPI), if duty changes were passed on in full to consumers as soon as they came into effect. The effects of the 2009 Budget will feed into the index over several months.
Last year the effect of the changes to duties for 2008 announced in the Budget would have added 0.25 percentage points to the one-month change in the CPI, if they had been passed on at once and in full. However the increase in road fuel duty was delayed until 1 December 2008, when a reduction in the rate of VAT was also implemented. If all the changes during 2008 from the March Budget and November Pre-Budget Report had been taken on in full and at once, it is estimated that it would have had an effect of about -1.13 percentage points to the one-month change.
For the Retail Prices Index, it is estimated that this year's Budget will add 0.28 percentage points to the one-month change.
For further information on the estimated impact on inflation please refer to the full article on the 'Estimated effect of the April 2009 Budget on the Consumer Prices Index and the Retail Prices Index'.
Source: Office for National Statistics (ONS)
Notes: This note is prepared simply as a guide to users of the Consumer Prices Index (CPI) and the Retail Prices Index (RPI). The Office for National Statistics accepts no liability whatsoever for losses of any kind arising as a result of reliance on this note.
The CPI is the main UK domestic measure of inflation for macroeconomic purposes; the inflation target for the UK is expressed in terms of the CPI. The uses of the RPI include indexation of pensions, state benefits and index-linked gilts.
The effects of the Budget given above are estimates only; they are based on average retail prices as measured in the March 2009 indices.
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Consumer Price Indices (CPI) First Release