[ancient_geezer]

Hmmm!, an automatic downward adjustment, to the FCA and costs of government. The political tendency is to understate inflation

True, but that's because the political benefit is currently for understating it.

When there is a significant advantage for doing otherwise, it isn't difficult to imagine the bureaucracy manipulating the numbers in the other direction instead.

Perhaps you will explain for us the political advantage of overstating the inflation rate. Lets see, high rising interest rates, falling liquidity and availability of loans. Most of the investment money starts churning hard assets instead of being applied towards long term capital expansion with a commensurate loss in business growth. We end up pushing the velocity of cash flow but lose commercial profitability.

Monkeying with the numbers outside of nominal error limits is disasterous with no political advantages to be found. Unless of course you are out to destroy a nation and foul your own nest right along with it.

[Technogeeb]

Perhaps you will explain for us the political advantage of overstating the inflation rate

Right now, there really isn't one. But when the "prebate" government payouts are tied to that value (since that value is used to generate the CPI, which is used to determine the "poverty" rate), the political advantage would be there for someone with the objective of converting the minor redistribution mechanism into a major socialistic one.

Monkeying with the numbers outside of nominal error limits is disasterous with no political advantages to be found. Unless of course you are out to destroy a nation and foul your own nest right along with it.

Leftists have often demonstrated a refusal to believe the rules of the marketplace apply to them. The very willingness to embrace socialism is itself suggestive that they would be more than willing to "foul the nest" in order to obtain their objectives, and there are more than enough examples of government stupidity in such matters (such as having taxes that cost more to administer than they provide in revenue).