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A measure of core inflation in the UK

Andrade, Isabel and O'Brien, Raymond (2007) A measure of core inflation in the UK , Southampton, UK University of Southampton 32pp. (Discussion Papers in Economics and Econometrics, 708).

Record type: Monograph (Discussion Paper)

Abstract

We develop a measure of core inflation in the UK over the period January 1987 - December 1998, following the work of Bryan, Cecchetti, Wiggins and Roger. Disaggregation is into 85 price categories. Given the high kurtosis of the price change distribution over this period, a trimmed mean is a more robust estimator of core inflation than other published measures such as the RPIX widely used in the UK, in particular by the Bank of England when targeting inflation. We discuss the relative advantages of our measure of core inflation, with emphasis on the determination of an optimal trimming point and on the analysis of the products whose price changes are excluded from our measure in each time period. The resulting measure appears well behaved, but differs noticeably from a number of published measures.

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More information

Published date: 18 September 2007
Additional Information: Working paper: accepted subject to revision

Identifiers

Local EPrints ID: 35209
URI: http://eprints.soton.ac.uk/id/eprint/35209
ISSN: 0966-4246
PURE UUID: d4ba730b-2c2f-47ba-a89b-3404d7756f22

Catalogue record

Date deposited: 16 Jun 2006
Last modified: 17 Jul 2017 15:48

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Contributors

Author: Isabel Andrade
Author: Raymond O'Brien

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