- By Kevin Peachey
- Cost of Living Correspondent
The purchasing habits of clean living consumers are reflected in changes to the basket of goods and services used to calculate the rising cost of living.
Alcopops have been removed and frozen berries used to make fruit smoothies have been included, the Office for National Statistics (ONS) has said.
Electric bikes have also been put in the virtual basket and digital compact cameras taken out.
Thousands of prices are collected to calculate the rising cost of living.
The so-called inflation basket contains more than 700 goods and services. The cost of these items in many different shops is collected by the ONS to provide the monthly inflation figures.
In itself, the inflation rate is an important measure that is used in decisions on uprating benefits and pensions, and is cited during salary negotiations.
The rate recently hit a 40-year high, but is expected to decline as the year progresses.
Recent changes in the basket
Among the objects removed from the virtual basket is:
- CDs outside the top 40 of the charts
- Digital compact cameras
- 20 super king size cigarettes
Among the objects added to the curve is:
- Frozen berries
- Sound bars
- Security cameras for the home
- Hygiene towels
In addition to reflecting consumer trends and technology, the weighting of different sectors in retail and services is important for an accurate calculation.
The ONS said the removal of alcopops was partly the result of restaurants, cafes and pubs being over-represented.
Some items are changed because of how representative they are of consumer spending and the overall level of spending. This is the reason cited by the ONS for replacing tampons with sanitary napkins in the basket.
Mike Hardie of the ONS said: “The importance of mobile phone technology continues to resonate with the removal of CDs and digital cameras from our baskets, reflecting how most of us listen to music and take pictures directly from our phones in these days.
“With many people looking to reduce their impact on the environment, we have also introduced e-bikes, whose popularity has increased significantly in recent years.”
ONS reviews the basket once a year and the changes it makes are only a small percentage of the items selected.
This time, 26 items have been added, 16 removed and 717 left unchanged.
The ONS said it would expand the number of train fares it checks to calculate average price increases. In future, it will use an industry database of 30 million price points rather than an index calculated by a regulator.
Electricity, gas and other fuels make up almost 4.9% of the ONS’s new inflation basket, the highest share in over a decade. Last year, the ONS believed that households spent 3.6% of their spending on fuel, but as prices have risen, that proportion has increased.
This will have an effect on how quickly inflation falls: as fuel takes up a larger part of the curve, changes in fuel prices become more important.
Myron Jobson, personal finance analyst at Interactive Investor, said: “The ONS basket of goods is becoming increasingly diverse, with the inclusion of products that some of us would not even dream of buying.
“It is not an exact science, and its variability should remind us that the experiences of the rising cost of living are unique to each individual.