Whilst the rate of price inflation appears to have started falling in recent months, it has remained stubbornly above the government target for this important economic indicator.
The Office for National Statistics has updated the ‘basket’ of goods and services used to calculate price inflation each month.
Looking at the items changed in the basket during this update provides an interesting insight into our patterns of spending and consumption today.
Items removed from the inflation basket include casserole dishes, step ladders and charges for developing camera film. The increasingly popularity of digital photography appears to have consigned film photography to the inflation history bin.
Included in the list of items added to the basket was tablet computers (such as the iPad) and teenage fiction books (including the Twilight series).
The Office for National Statistics (ONS) has also included bundled communication packages where television, Internet and telephone are combined in one package for users.
The range of beers included in the inflation basket has been widened with the addition of cans of stout. Other foods and drink items added include pineapples and hot oat cereals.
This virtual basket of goods and services results in the ONS tracking the price changes of 180,000 separate price quotations every month. They review the price of nearly 700 different items across 150 areas of the UK to determine the average rate of price inflation.
Each item in the inflation basket is weighted, with some items having a bigger impact on the calculation than others. For example, transport is given more weight than food because it tends to be a more expensive part of our lives.
Photo credit: Flickr/ccarlstead
