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E-books and rum newly included in measure of rising cost of living

The Momentum UK Team 13 March 2013

The "basket of goods" that is used to calculate the Consumer Price Index (CPI) cost of living now includes white rum, e-books, and digital television recorders, while the cost of a freeview box is no longer included in the calculation.

After a review of what is included in the calculation of inflation the ONS has changed its basket of goods to better reflect the spending habits of Great Britain in 2012/2013. The ONS updates the CPI calculation of inflation every year in order to accurately reflect spending habits and trends, adding and removing items accordingly.

The list contains about 700 individual items and about 18,000 individual prices are collected each month from 150 specific locations within the UK to be used in the ONS calculation of the rising cost of goods and services over time.

In January, the CPI placed the level of inflation at 2.7% for the fourth consecutive month.

As well as providing a useful tool to measure inflation, the goods included and excluded can provide an insight into the consumer habits across the UK. For example, after the digital switch over, the freeview box has been replaced by the digital television recorder and an increase in shoppers wishing to eat healthily has seen blueberries and stir fry vegetables added.

Champagne has been removed from the list as sales fell 7% last year, while white rum is newly included, representing both an increase in sales from off licences and the changing drinking habits of young adults.

Historically the basket good used to calculate CPI  has always provided a reflection of life within the UK. In the 1950s, dance hall admissions and the mangle were included into the list. In the 1970s the cassette recorder and dried mashed potato were added which have now dissappeared again, while muffins and fruit smoothies joined the list at the beginning of this century.

Momentum