Smartphones, apps and dating site fees added to UK’s inflation basket

Shopping in the UK has officially gone digital, with smartphones and their apps being added to the typical basket of goods used to calculate inflation.


Dating agency fees have also been included for the first time to reflect the rising use of these websites, the Office for National Statistics said.
The ONS updates its 650-strong basket of goods and services annually, to better reflect public spending habits.
Consumer price inflation is currently running at 4%, double the Bank of England’s target of 2%.
The shifting of goods and services in and out of the basket gives an insight into the changing nature of shopping habits and new technology in the UK.
The ONS collects about 180,000 separate price quotations of this basket of items in 150 areas of the UK.
These are then used to calculate the Consumer Prices Index (CPI) and Retail Prices Index (RPI) measures of inflation.
Smartphone applications have replaced mobile phone downloads, such as ringtones and phone wallpaper, in the ONS’s estimate of a typical shop.
“Many of these new items show the way technology is changing our lives. Powerful smart phones and the applications that run on them have become essential for many when communicating or seeking information,” said ONS statistician Phil Gooding.
“Likewise, increasing numbers of people now seek a partner via internet dating sites.”
Also added to the 2011 basket were sparkling wines and oven-ready joints, with vending machine cigarettes and pork shoulder being taken out.
With many households setting up home cinema systems, the ONS will collect the prices of televisions with screens bigger than 32 inches separately from the cost of other sets.
The ONS ensures that items or distinct markets where consumers’ expenditure exceeds about £400m a year are explicitly represented in the basket, unless adequately represented by other items.
Where spending on items falls below £100m a year, there should be good reason for their continuing inclusion in the basket, the ONS said.
For example, while spending on acoustic guitars and power drills is relatively low, both are included in the basket to represent wider markets, namely musical instruments and electrical tools.
Changes to inflation basket
IN
Smartphone handsets and their apps
Dating agency fees
Hair conditioner
Oven-ready joint
Dried fruit
Sparkling wine
Medium density fibreboard (MDF)
Craft kit
OUT
Mobile phone downloads
Vending machine cigarettes
Rose bushes
Pork shoulder
Vet fees for spaying a kitten
Hardboard