In view of the fact that, according to the RPI, clothing and footwear prices increased by 6.3% from June 2009 to June 2010 whereas, according to the CPI, they fell by 1.4%, an explanation for the difference was sought from the Office of National Statistics (ONS) under the Freedom of Information Act. On 18 October 2010 the following explanation was received:-

"For clothing and footwear the only difference in the coverage between CPI and RPI is that dry cleaning is included in CPI but classified elsewhere in RPI. Here the main difference between the CPI and RPI measures is due to the different formulae used in constructing the lowest level aggregates. As mentioned above, an arithmetic mean is used in the RPI whereas a geometric mean is used in the CPI."

Because it was difficult to comprehend that a difference of 7.7% could have occurred mainly because of the way in which the increase was calculated, a supplementary question was then sent to the ONS. This elicited the following reply:-

"The individual items used in constructing the RPI for clothing and footwear are the same as those used in constructing the CPI except for one. As mentioned in the previous response, dry cleaning is included under clothing and footwear in the CPI but not in the RPI where it is classified to domestic services. The difference between the CPI and RPI clothing and footwear series is principally caused by the difference in the arithmetic and geometric mean methodologies at the lowest level of aggregation.

There is a breakdown of clothing and footwear in the CPI (to the level of garments; other clothing and clothing accessories; cleaning, repair and hire of clothing; and footwear) but garments is not broken down into time series for men's outerwear, women's outerwear and children's outerwear.

There is some information produced each month at this level of detail for data validation purposes but this is initially based on provisional data and is not stored as a time series on our system for extraction."

While it is theoretically possible that, when applying the geometric mean and arithmetic mean to the same items, the former can produce a price fall and the latter a price increase, the scale of the differential in this case is such that this explanation does not seem to be adequate. For this to be true such a wide range of price variations would be implied as to almost defy credibility.

Further analysis undertaken by the Fund suggests that the stratification used in the RPI - whereby the items subject to the larger price increases happen to be assigned a greater weight - accounts for some of the difference. If stratification were to be removed, the RPI increase would have been 4.9% instead of 6.3%. However, it is fair to say that a plausible explanation for the remainder of the difference will probably remain elusive.

At about the same time as the ONS was responding to the Fund's queries, the Bank of England's Inflation Report revealed that, during the period 1999 to 2009, the price increase for clothing and footwear had been understated and that this will have affected both the CPI and RPI. While this pre-dates the period which prompted the Fund's enquiries, there is a suspicion that the problems with this series may have continued to exist after 2009.

Finally, anyone wishing to investigate differences between the RPI and CPI from September 2010 onwards (can it be assumed that the date of change is not significant?) will unfortunately find it either more difficult or more expensive to do so. The following Information Notice was issued by the ONS on 27/7/2010:-

"From October 2010 the Monthly Digest will be published by ONS as an enhanced web-only publication. The September 2010 edition of the Monthly Digest will be the last official ONS print edition under existing arrangements.

Last year the Office for National Statistics (ONS) reviewed its publication strategy and decided to cease production of the printed versions of ONS publications in 2010 in favour of web-only outputs. Palgrave Macmillan will continue to print titles under their own imprint for customers who require print (for further details see www.palgrave.com/ons).

A number of improvements will be introduced to the online version of Monthly Digest from October……"

The link to the web-based version is http://www.statistics.gov.uk/statbase/Product.asp?vlnk=611. Unfortunately an attempt to extract information via the new web-based system proved to be unproductive because it was not possible to access a sufficient level of detail.