Jam tarts and sausages out, Nintendo and lager in: Index revised as inflation rises to 1.8 per cent

Click to follow
FAN BELTS, mackerel and visits to the sauna are out. Rainbow trout, mascara and skiing trips to the Alps are in. But whatever is included in the average British shopping basket, the prices keep on rising.

The Central Statistical Office has completed its annual reshuffle of the retail price index, its best guess at the bundle of goods and services consumed by the average household. The RPI is used to calculate the average annual change in the cost of living - the rate of inflation.

Every year, the contents of the RPI are revised to reflect changes in how the average family spends its money. Items leaving the index this year include beef sausages, jam tarts and sterling silver St Christopher medals. New arrivals include Nintendo and Sega computer games, cook-in sauces, self-drive car hire, windscreen wiper blades, bottled lagers and ear-rings.

Other arrivals and departures reflect the growth of convenience shopping. Two-litre bottles of lemonade have replaced one-litre bottles and pre-packed red potatoes have replaced loose red potatoes.

The most important new arrival is foreign holidays, which account for 3 per cent of the average family's annual spending. They joined the index in February, rising in price by 0.3 per cent from January.

In recent years, condoms, compact discs, satellite dishes and multi-vitamins have joined the index. Lard, sanitary towels, tinned rice pudding, net curtain material and black and white televisions have left. The content is determined largely by the annual Family Expenditure Survey, for which 7,000 households keep a record of spending in a given fortnight.

An item's weight in the RPI can alter because of changes in its price or the quantity bought. The price of cheese has risen 9 per cent in the past year, while the quantity bought has barely moved. Furniture prices are the same as a year ago, but sales have grown by nearly 15 per cent.

The proportion of the budget spent on food has dropped from 35 per cent in 1956 to 14.4 per cent this year, while motoring has risen from 3 to 13.6 per cent. One item which remains a crucial component of any family's budget - included in the RPI - is the price of sending a single red rose to Watford.

The annual rate of inflation rose from 1.7 to 1.8 per cent last month, as the impact of the pound's devaluation began to feed through to shop prices. The increase was largely due to higher prices for food, petrol, clothes and leisure goods.

Inflation up, page 17