§ Lord Jacobs
asked Her Majesty's Government:
What steps they are taking to ensure that the Monetary Policy Committee takes into account, when considering the level of interest rates, that in May 2000 the retail prices index, excluding mortgage interest payments (RPIX), would have been 1.6 per cent and not 2 per cent if the depreciation component for owner-occupied houses had not been introduced into the index in 1995. [HL3332]
§ Lord McIntosh of Haringey
The Monetary Policy Committee (MPC) is tasked to meet the Government's 2.5 per cent inflation target, which is defined in terms of the 12-month rate of increase in the Retail Prices Index excluding mortgage interest payments. The MPC monitors and takes account of all relevant economic variables, including house prices, when setting interest rates to meet the inflation target.