Business

E-cigarettes and craft beers in updated inflation basket

Man smoking e-cigarette Image copyright AFP

E-cigarettes and specialist "craft" beers have been added to the basket of goods used to measure the UK's inflation rate.

The additions are part of the Office for National Statistics' (ONS) annual revision of the basket.

The cost of music streaming services has been added as well, but sat-navs have been dropped.

The basket of goods currently contains 703 items and services, of which 13 are new this year after eight were removed.

The inflation rate currently stands at a record low of 0.3%, as measured by the Consumer Prices Index.

Price survey

Inflation basket 2015

Goods used to measure inflation

IN

Specialist craft beers

IN

E-cigarettes

  • OUT Frozen pizza - we're buying chilled ones instead

  • OUT White emulsion - we're decorating with more coloured paints

  • OUT Sat nav - people are using their smart phones to navigate

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The ONS said that e-cigarettes had been added because many smokers were using them.

Sales of "craft" beers have been brought in because more money is being spent on them, along with a rise in the shelf space devoted to those beers in shops and supermarkets.

Although only around 700 items have their prices tracked each month, many are measured in several places. So 110,000 prices are collected from 20,000 shops in the UK, with another 70,000 prices measured online.

Revisions to this year's basket continue to reflect the fast-moving change in the use of technology.

For 2015, the cost of music streaming services has been included, along with subscriptions to online console computer games.

Headphones have been added too, as well as mobile phone accessories such as covers and chargers.

However, sat navs are no longer included. "Partly because many drivers now navigate using smart phones, but also because some new cars now come with sat-navs built in," the ONS said.

Recent years have seen additions to the basket of the cost of video streaming services, e-books, tablet computers and smartphones.

Out have gone DVD recorders, Freeview set-top boxes, the cost of developing colour films and mobile phone downloads.

In during 2015 Out during 2015
Chilled pizza Frozen pizza
Liver Home killed beef, braisingsteak
Oven-ready joint,gammon/pork Oven-ready joint
Melon Yoghurt drink
Sweet potato White emulsion paint
Protein powder Satellite navigation device
Specialty beer Cut flowers, lilies
E-cigarettes Foreign exchange commission
Coloured emulsion paint
Mobile phone accessory
Headphones
Games consoles onlinesubscription services
Music streaming subscriptionservices

In and out

Items in the basket may be introduced or dropped to reflect changes in how much people are spending on them, and also to reflect new categories of spending.

So the cost of protein powders for gym-goers is now being measured to reflect the wider group of sports food supplements.

The ONS said this was "a distinct and growing sector not previously covered within the class".

Other changes are made each year to improve the coverage of an existing category of goods.

That explains the introduction of headphones to improve the coverage of audio-visual equipment.

In a similar move, sweet potatoes have been added to the vegetable category.

"This is an area of the basket where there is much variability in price changes so it is beneficial to collect across as broad a range of items as possible," the ONS said.

Likewise, melons have been added to the fresh fruits whose prices are measured.

Yoghurt drinks have been dropped, partly because less is being spent on them.

But other items, such cut lilies, have been left out because they are simply a variation on other items still in the index and it has been judged that dropping them will have no effect on the accuracy of the overall basket.

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