THATCHER, Margaret; Harold Wilson.

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Typed letter signed from Margaret Thatcher to Harold Wilson, on the retail price index. Margaret Thatcher writes at length, as prime minister, to her predecessor in the office, Harold Wilson, about the calculation of the Retail Price Index, a key method of determining inflation. Both Wilson and Thatcher recognized inflation as a core issue of their governments, and their premierships can both, in many ways, be defined by their response to it.The proper calculation of the Retail Price Index was crucial for the government, as it was the basis for measuring living standards and to calculate wage demands. It remains the "headline" calculation of inflation that the media uses, even if government calculations use broader criteria. Thatcher continues earlier correspondence which is untraced:"Dear Lord Wilson, In my letter to you of 21 June I said we would look further at your suggestions for changing the way we calculate the Retail Price Index. Our statisticians very much agree with your view that the present system can be unduly affected by a single month's fluctuation in prices. They have been looking for some time at ways of developing supplementary series which give a better additional guide to the underlying trend in prices and which are not so affected by price rises a year earlier or by one-off fluctuations in price. But so far none of the possible alternatives has proved satisfactory.Your suggestion of a three month moving average would have the effect of smoothing out the m

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