New Inflation Rates - June 14, 2016

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Head Office Circular No. NP/168/16

To the Secretary, all Branches and Regional Councils
Tuesday 14 June 2016

Dear Colleagues

INFLATION: INSIST ON YOUR PAY DEAL BEING BASED ON RPI

The Retail Prices Index (RPI) was 1.4% for the year to May 2016, up from 1.3% for the year to April 2016.

Some employers/ government agencies are attempting to sideline RPI and are instead pushing other measures of inflation – such as CPI (0.3% for the year to May 2016) or CPIH (0.7% for the year to May 2016). Both CPI and CPIH are inappropriate for use in settling pay claims. This is because they are designed for comparing different countries’ economic performances, rather than average workers’ costs. Furthermore, CPI and CPIH tend to understate changes in the cost of living:

 Inflation circular June 16 graphic

Attempts by an employer to link pay awards to CPI must be resisted and logged with the Policy Department.

Further information will follow in the Pay Bulletin presently.

Yours sincerely,

 

Mick Cash
General Secretary