INFLATION CONSCIOUS ACCOUNTING

At the present moment in this country, and it is inflation in this country that immediately concerns us, we are all aware of constantly increasing prices. There are two ways in which the change in prices is measured by the Government statisticians. The best known measure is the Index of Retail Prices which covers the main goods and services on which householders spend their money. Certain non measurable items are not included but the index does give the average change in prices of the items on which the index is based weighted according to their importance in household expenditure in the previous January. In calculating these weights the expenditure of householders where the main income is a retirement pension or where the income of the head of the household is above a certain limit (£70 a week at present) is excluded.