Smartphone rings the changes in official price basket

Economics Editor,Sean O'Grady
Wednesday 16 March 2011 01:00 GMT

Last year the changing British way of life was reflected by the inclusion of shop-bought cooked chickens to the "inflation basket"; this year it is the turn of the apps that run on smartphones, and smartphones themselves, now a separate category to mobile phones, to make their mark.

Other officially recognised signs of the times include a downgrade in the weighting for what the Office for National Statistics term "sensible high-heeled shoes", an oxymoron to some, and the abolition of separate listings for morning and evening provincial newspapers, as their number, variety and circulations shrink.

In its annual review of the items it uses to monitor the cost of living, the ONS has decided to eject mobile phone downloads, such as ringtones and wallpaper, after a relatively short residence in the index, as well as the price of vending machine cigarettes, reflecting their retreat from pubs and clubs.

An increasingly time-poor society with fewer opportunities for traditional courtship also sees dating agency fees monitored as part of its cost of living. And trends in eating and drinking habits have been spotted once again by the national statisticians; sparkling wines, dried fruits and oven-ready joints are in; four packs of lager, and the shoulder of pork are given the shoulder.

ONS statistician Phil Gooding said: "Many of these new items show the way technology is changing our lives. Powerful smartphones and the applications that run on them have become essential for many when communicating or seeking information. Likewise, increasing numbers of people now seek a partner via internet dating sites."

Other changes to the basket will see television prices collected differently, with the price of TV sets larger than 33 inches being measured separately. This is to reflect a change in the market as many households now have "home cinema" systems.

Reflecting its spiralling cost, the ONS has also increased the weighting food of items , from 11.2 per cent to 11.9 per cent of household spending.

Some items have made way for new additions to the basket within the same product grouping. For example, spectacles without lenses have been replaced by spectacles with lenses, although both products represent spectacles. Hardboard has now been replaced by MDF.

The ONS collects about 180,000 prices every month for its basket of about 650 goods and services. Changes in the prices of the items are used to compile the main measures of inflation: the consumer prices index (CPI), used to target inflation at 2 per cent by the Bank of England and the older retail prices index.

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