Inflation basket 2017: how scooters and gin are affecting your finances
The latest ONS inflation basket shows that we're moving towards gin and scooters and away from alcopops and garden swings.
We’re buying gin and children’s scooters and ditching alcopops, according to the latest inflation basket from the ONS.
The ONS checks 180,000 prices on more than 713 different products each month to ensure that the UK’s typical shopping basket is in line with modern buying trends.
It’s primarily used to calculate the Consumer Prices Index (CPI) and Retail Prices Index (RPI), keeping them as up-to-date as possible.
Inflation currently sits at 1.8%, with rises expected in the near future thanks the ongoing weakness in the pound following the vote to leave the EU.
Why RPI and CPI matter
The RPI and CPI measures of inflation are important as they are used by the Government to decide how prices rise and fall for pensions and benefits.
The State Pension for example rises by the greater of 2.5%, CPI or average earnings growth. So, pensioner income is impacted by changes to CPI.
RPI is also used to determine costs of rail fares and some companies use the measure to hike the cost of things like mobile phone contracts.
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A couple of comebacks
Gin hasn’t been in the basket for 13 years, but it's back thanks to the rise of craft gin distilleries and the popularity of botanical gins. Sales reached £1 billion for the first time in 2016.
Children's scooters have replaced the swing in the ONS basket of goods. This is partly due to swings being less popular in winter, and partly because scooters are proving an increasingly popular gift for kids in general.
Cycling helmets made a return after 12 years and feature alongside men’s base layers, which the ONS reckons is due to British cyclists’ success in the Olympics and the Tour de France.
A greater uptake in dairy-free diets has seen the sale of alternatives like soya, rice and oat milk skyrocket, which is why they’ve been added to the basket this year.
What’s hot and what’s not
The ONS suggests that the new additions reflect the increasing influence of 'hipster' subculture, which is typically focused less on consumerism and more on artisanal food and drink as well as veganism.
- Gin;
- Chocolate biscuits;
- Non-dairy milk;
- Flavoured water;
- Bottled flavoured cider;
- Canned cider;
- Men’s base layer top;
- Cycle helmet;
- Child’s scooter;
- Cough medicine;
- Jigsaws;
- Council tax.
These are the products that are on their way out:
- Alcopops;
- Bottled apple cider;
- Menthol cigarettes;
- Single drainer sink;
- Brake pads;
- Old fashioned mobile phone handset;
- Child’s garden swing;
- Fee for stopping a cheque.
The inflation basket goes back 70 years and when it was first introduced it included corsets and mangles.
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