LONDON -(Dow Jones)- The new basket of goods used to calculate official U.K. inflation reveals U.K. consumers’ penchant for hot takeaway food from supermarkets and their enthusiasm for the latest technologies.
In its annual review of the goods and services prices basket, the Office for National Statistics said Monday it is adding bottled rose wine and hot rotisserie chicken to reflect changing consumer tastes and habits.
Internet-based DVD subscriptions, high definition Blu-ray discs, MP4 players - which play video as well as audio - and Freeview TV receiver boxes also made the list, the latter responding to the digital TV switchover.
“Many changes in the 2009 basket occur in the categories covering food and drink,” the ONS said.
“Trends in consumer technology often impact on the inflation basket and this year is no exception,” it added.
The ONS collects approximately 120,000 prices every month for a basket of 650 goods and services which it uses to calculate its two main measures of inflation: the consumer price index and the retail price index.
The Bank of England targets CPI inflation at 2%, while the RPI is used to calculate increases in pensions and some other state benefits, and has traditionally been used as a basis for pay awards.
The changes in the basket will take effect from February 2009 price data, with the release of CPI numbers Tuesday. Those are expected to show that inflation declined sharply to 2.5% in annual terms last month, from 3.0% in January.
To make room for the growing popularity of rose wine, the ONS said it is dropping from the basket the traditional wine box. Smaller bottles of cider for individual consumption also take the place of large party-size bottles.
In another sign of the times, large eggs have been replaced with large free-range eggs, it said.
MP4 players replace outdated audio-only MP3 players, while Internet-based movie rentals substitute for shop-based services, as consumers plump for the convenience of making their viewing selections from home.
The basket also indicates the increasing popularity of non-carpet floor coverings, with the addition of hardwood flooring to accompany laminate flooring.
-By Natasha Brereton, Dow Jones Newswires; +44-20-7842-9254; natasha.brereton@dowjones.com
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(END) Dow Jones Newswires
March 23, 2009 07:59 ET (11:59 GMT)
