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Should we strip hotel prices out when analysing services CPI? (1/2)

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  • There was a further upside surprise to services CPI in the June report, but this was very narrowly focused on accommodation prices and we don’t think that it will alter the view of any MPC member.
  • Note that accomodation services contributed 0.09ppt to the change in headline CPI in June (roughly double that for its contribution to services CPI).
  • Overnight hotel stays make up a large proportion of the accommodation index.
  • The ONS has 125 hotels in its sample, of which there were only 56/125 hotel prices that the ONS was able to use in its calculation for the June data. (The excluded hotels had prices that were temporarily unavailable – which in a large proportion of cases is because they were not accepting bookings for a single night stay on the day of the survey period – possibly because they were fully booked).
  • Of these only 34 were able to provide a price for both May and June (which in itself shows the changing availability of hotels prices in the sample on a month-to-month basis).
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  • There was a further upside surprise to services CPI in the June report, but this was very narrowly focused on accommodation prices and we don’t think that it will alter the view of any MPC member.
  • Note that accomodation services contributed 0.09ppt to the change in headline CPI in June (roughly double that for its contribution to services CPI).
  • Overnight hotel stays make up a large proportion of the accommodation index.
  • The ONS has 125 hotels in its sample, of which there were only 56/125 hotel prices that the ONS was able to use in its calculation for the June data. (The excluded hotels had prices that were temporarily unavailable – which in a large proportion of cases is because they were not accepting bookings for a single night stay on the day of the survey period – possibly because they were fully booked).
  • Of these only 34 were able to provide a price for both May and June (which in itself shows the changing availability of hotels prices in the sample on a month-to-month basis).