UK inflation basket changes

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The world may not have heard of EL James and her Fifty Shades of Grey trilogy were it not for her first publishing the erotic thrillers as ebooks. Perhaps the government"s statisticians were among her readers – they have decided to mark the growth in digital book sales by adding ebooks to the basket of goods that is used to calculate the annual inflation rate, reports Chartered Accountants Northampton Harris & Co.

 

The Office for National Statistics (ONS) said ebooks, read on devices such as Amazon"s Kindle or the Kobo eReader, represent "a significant and growing market", noting huge recent increases in the number of people reading books digitally. Data from Nielsen and Kantar Worldpanel suggests that ebooks accounted for 13-14% of all book sales in the UK in 2012, in volume terms, and around 6-7% of all book sales in value terms.

 

The new basket of goods will used for the next 12 months to calculate the cost of living but is also a barometer of what consumers are currently buying – and what they have shunned.

 

As well as ebooks, consumers are currently spending their money on digital television recorder/receivers, including personal video recorders. They replace standard Freeview receiver boxes, indicating that consumers are increasingly switching to devices that allow them to pause, record and rewind live television.

 

As well as consumer trends, the ONS basket of goods also tells us what consumers are eating and drinking. According to the ONS, hot chocolate, blueberries, continental sliced deli type meats and packaged vegetables for a stir-fry are selling like ... hot cakes.

 

Perhaps more worrying is a rise in sales of white rum, which the ONS said appeals to increasing numbers of younger people. But perhaps it"s more a case of the government"s austerity measures dictating what consumers can afford to drink – sales of champagne have been taken out of the basket as the amount of champagne consumed continues to fall.

 

On the DIY front, self-assembly kitchen wall units are being added to the basket to improve coverage of furniture, while basin taps are being removed. Packs of daily disposable contact lenses are also entering the basket, replacing a pair of soft contact lenses.

 

The first retail price index (RPI) was published in 1914 and was dominated by food and shelter. Today, the ONS attempts to measure the cost of living by noting the prices of 700 separate goods and services in 150 different areas of the UK, but one of the big changes in recent years has been the spread of digital technology, with tablet computers added in 2012.

From the Guardian

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