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Pork pies out, quiche and raspberries in: how changing consumer tastes are reflected in official inflation measures

Move over, pork pies and leg waxing; raspberries and gym attire are now considered in vogue for British consumers, whose eating habits are changing as they become more health conscious.
The “shopping basket” of goods which is used to measure the rate at which prices are increasing in the UK has changed, according to the Office for National Statistics. Consumer consumption tastes shift over time. As a result the ONS updates its “shopping basket” ingredients each March in order to measure the aggregate impact of rising prices more accurately.
While the choice of goods and services often seems humorous, accurately measuring consumer prices is vital part of determining the pace of inflation. This in turn informs the decision making process of the UK’s central bank, the Bank of England, when it examines the need to raise or lower interest rates. The price a consumer pays for a pork pie may help inform whether or not the cost of servicing a mortgage increases, for instance.
Inflation above 2%
Squeezed living standards are also an important consideration when it comes to determining the impact of rising price pressures through consumer price inflation, known as CPI.
CPI grew by 2.7pc in the twelve months to January. The annual rate of earnings growth, released in April each year, was 2.2pc. As inflation has outpaced earnings growth, many consumers have felt their budgets are shrinking.
There are other measures of inflation, such as the Retail Prices Index, but CPI is widely believed by economists to be more accurate. Indeed, Bank of England head Mark Carney has called for RPI to be abandoned in some areas, including for government bonds. As RPI, which is also the measure used to calculate rail fare rises, is often higher than CPI by an average of 0.7pc, that would result in a lower return for saver who hold inflation-linked gilts. However, such a move would save the government roughly ?2.2bn each year.
Other changes to the inflation basket this year include the addition of quiche, raspberries and ready-made mashed potato. In a signal of the changing ways in which UK consumers cook and eat, its addition comes 30 years after the exclusion of instant mashed potato mix Smash and other add-water potato powder mash alternatives.
Pork pies out, quiche and raspberries in: how changing consumer tastes are reflected in official inflation measures

The importance of soft fruits has changed in the inflation basket, as more people are buying raspberries

Credit:
TOBIAS SCHWARZ/Getty
Pork-pies have been cast aside as an individual item and are now combined under a meat-based snack umbrella, sharing a metric with mini Cornish pasties and scotch eggs.
Leisure pursuits have also been shifted about.
Digital camcorders, which have become less popular as the video capabilities of mobile phones has improved, have been removed. Digital media players such as Apple TV and Chromecast have replaced older forms of TV recorders such as Freeview boxes. The Go-pros, or action cameras, beloved of divers and snowborders, have also been added.
Leg waxing has been removed as it is considered less important for measuring price changes than other beauty activities and products. Body moisturizing lotion, and women’s gym leggings have been added.
The rise of the contactless payment method has also resulted in the removal of ATM charges, and the decline of nightclubs has led to the “bottle of lager in a nightclub” measure being dropped, following the removal of admission charges for clubs in 2016.
Changes to the inflation basket, which have been catalogued since 1947, also act as an important tool for social and economic historians.  
Philip Gooding, of the ONS, said: “Every year we add new items to the basket to ensure that it reflects modern spending habits. We also update the weight each item has to ensure the overall inflation numbers reflect shoppers’ experiences of inflation.”
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