Monitoring Review 2/15
Deflators are used widely in the production of official statistics within government, and in analysis using official statistics outside government, to remove the effects of changes in prices from a time series. This enables statistics to be compared across time in ‘real terms’. The Office for National Statistics (ONS) collects a huge volume of data on prices and these are used, alongside other information, to produce many aggregate series that are used as deflators. This is a complex process as prices data are collected from many people – producers, consumers, retailers and traders – and aggregated in different ways for different purposes and perspectives. Experienced users debate long and hard about the underpinning formulae to use when aggregating these deflator series, and inexperienced users may need some expert guidance on how to choose the best series for their particular purpose.