Mineral water ousts canned drinks in inflation 'basket'

Canned fizzy drinks have given way to bottled mineral water in the goods basket used to measure inflation, the Office for National Statistics (ONS) said today.

The move reflects higher spending on smaller bottles of mineral water in the "on-the-go" drinks market in recent years, the ONS said.

The latest snapshot of the nation's spending habits also showed hair straighteners replacing hairdryers and lipstick giving way to lip gloss.

Cereal bars are included for the first time, while pitta bread has been replaced by garlic bread in the nation's tastes, statisticians said.

Other new items in the basket include frozen fish in breadcrumbs, allergy tablets, liquid soap and Blu-ray disc players, which follows the introduction of Blu-ray discs for the first time a year ago.

Among this year's discarded items are disposable cameras, due to the increasing popularity of digital compacts and cameras on mobile phones. Eyesight test charges and squash court hire are also dropped.

The ONS collects about 180,000 prices every month for a basket of about 650 goods and services - the most comprehensive survey of its kind in the UK.

Statisticians have also changed the way in which mortgage interest payments are calculated for the Retail Prices Index (RPI), which was previously based on the average standard variable rates from major lenders.

The ONS will instead take into account a raft of discount, fixed- rate and tracker mortgages, representing 90% of the market, in its new calculations.

The Bank of England's cost of living benchmark, the Consumer Prices Index, is currently well above the 2% target at 3.5%, the highest since November 2008.

Inflation has been pushed higher by the increase in VAT back up to 17.5%, a 70% hike in oil prices over the past year and the effects of sterling's depreciation, although the Bank expects the inflation spike to be temporary.