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Reforms to update the RPI formula rejected

reforms to update the RPI formula rejected

11 January 2013

After a 3 month consultation the Office of National Statistics (ONS) has chosen not to bring the RPI more in line with the slower rising CPI. However, the ONS will be introducing a new, additional index of inflation – RPIJ.

The RPIJ will use a different formula than that used to calculate RPI and the ONS believe that this will be a much better measure of inflation.

So, away from the world of pension funds etc, what does this mean for tenants? Well, for existing lease arrangements, tenants will be stuck with the contractual RPI and will have to continue paying rents that are calculated using a formula which is not consistent with inflation. However, once the RPIJ starts to be published in March 2013, we’ll certainly be asking our retailer clients tenants whether they’d like to consider a move to the new RPIJ.

related opinions

Service charges – the bad news keeps coming for tenants!

A few months ago, we discussed a case where the Court of Appeal ruled that the wording of a lease precluded the tenant from arguing that certain costs should not have been included in the service charge calculation. A recent high-profile case concerns a broadly similar issue, this time in relation to the proportion of the landlord’s costs payable by a tenant.

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