Reusable drinking bottles, gluten-free cereals and canned cocktails have been added to the UK inflation basket to reflect changing behaviour linked to rising environmental concerns, food allergies and alcohol demand.
The Office for National Statistics added reusable bottles and mugs to the basket of goods and services tracked to measure the pace of inflation, reflecting “a rise in popularity with many consumers looking to decrease their environmental impacts”, said Philip Gooding, senior statistician at the ONS.
The ONS added 14 items to the basket and removed 16, as well as updating the weighting of each item “to ensure the overall inflation rate reflects households’ spending habits as closely as possible”, said Mr Gooding.
The inflation basket now includes gluten-free cereals to reflect the increasing amount of consumer spending and shelf space allocated to these ranges.
“Cocktails in a can” were also added together with gin served in bars and restaurants to reflect many brands introducing spirit mixes to their product range and gin’s “high consumer demand and spending”.
The ONS also tried to capture other aspects of changing consumer behaviour, including more people parking their car at the airport to pick it up on their return, so it added long-term airport parking to the basket. Until now, the inflation basket was only tracking short-term parking fees.
The ONS also recorded the rising popularity of self-tanning products which led to the introduction of the item to the basket, while buying frozen chicken breasts and frozen legs of lamb has become less common and they are no longer tracked to measure inflation.
The existing shop-bought video game is being replaced by three items acquired from gaming platforms in an attempt to reduce their large price variability. Instead of tracking the price of MP4, which has become less popular, the ONS is now tracking portable digital music players more generally, in a move that is expected to increase the number of products that can be priced and a more reliable inflation measure.
Softwood has also been removed because medium-density fibreboard is now more commonly used for do-it-yourself jobs around the home, while the beef topside joint has dropped out of the basket because unclear labelling made data collection difficult.
The prices for the 720 consumer goods and services that comprise the basket is based on about 180,000 price quotations from 40 location across the UK, the internet and over the phone.
The pace of consumer price increase is key for the Bank of England which has a target to keep inflation at around 2 per cent.
The ONS produces both a consumer price index and a consumer prices index including owner occupiers’ housing costs, which includes council tax and other housing costs and is considered the most comprehensive measure of inflation.
It also regularly publishes a retail price index, which is used in long-term contracts and index-linked gilts, despite the UK Statistics Authority recommending in 2019 that the publication of the RPI should be stopped.
The RPI is judged not to meet the standards required of national statistics because it is considered to overstate inflation.
