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3mo ago

ONS Revises April Inflation to 3.4% Over Vehicle Tax Data Error

The agency is reviewing its external data quality checks, with corrected vehicle tax figures set to be used in May’s inflation report.

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Cars are displayed outside a showroom in west London October 4, 2013. REUTERS/Luke MacGregor/File Photo
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The Office for National Statistics said the figures overstated the number of vehicles subject to vehicle excise duty

Overview

  • ONS identified an error in Vehicle Excise Duty data from the Department for Transport that overstated April’s CPI and RPI by 0.1 percentage points.
  • Revised figures show the 12-month Consumer Prices Index rate at 3.4%, down from the initially reported 3.5%.
  • In line with its policy on consumer prices, the ONS will not amend the published April statistics but will apply properly weighted tax inputs from May onwards.
  • The overstatement affected inflation-linked agreements, including mobile phone contracts, and intensified scrutiny of the ONS’s data reliability.
  • Bank of England Governor Andrew Bailey said the episode underscores the need for diverse data sources, prompting the bank to widen its range of indicators for rate decisions.