New Inflation Basket Revealed
Broccoli replaces Brussels sprouts in the latest shake-up of the Consumer Prices Index basket of goods. With the latest inflation figures revealed today, what else is in store for UK consumers?
Brussels sprouts are a Christmas has-been and broccoli has been hailed the trendy new dinner accessory.
At least, that's the state of play according to the Office of National Statistics (ONS), which this week published the contents of its latest `basket of goods'.
This basket, an historical measure of inflation, is also supposed to represent the typical consumer's shopping list.
So what's hot - and what's not?
A New Breed Of Consumer
The ONS has around 650 products in its basket of goods, and collects around 120,000 prices each month. Fluctuations in these values are used to compile the two main measures of inflation: the Consumer Prices Index (CPI) and Retail Prices Index (RPI).
The contents of the basket come under an annual review, designed to reflect changing consumer tastes and interests.
Items enter the basket for various reasons, with some making the statisticians shopping list because of consumer popularity, or simply to diversify the range of products for already established items.
Habitual Starbucks junkies have also influenced this year's compilation, with fruit smoothies and muffins debuting on the inventory for the first time.
Similarly, the iPod generation takes a firmer hold on this year's basket, with gadgets taking up a larger proportion than they have previously. MP3 players, USB sticks and mobile phones top up the basket of goods.
However, top 40 CD singles have been ditched, as the ONS recognizes the growing popularity of music downloads. The 35mm camera film has also been shown the door, as consumers are snapping up digital cameras instead.
The basket also says goodbye to the VHS video cassette, which has been reeled aside to make way for more modern technology such as the DVD player in recent years.
What about brussels sprouts? According to the ONS, sales of Brussels sprouts now only really take off in December, which is why they have been omitted from the basket this year, in favour of broccoli.
The Changing Market
The list reflects a changing market - one that is both more technologically savvy, and health conscious it seems, as the portable TV and, you guessed it, 'ghettoblaster' sound system makes way for the digital radio and probiotic drink.
However, the ONS does stress that the list more reflects consumer tastes over time as opposed to sudden trends in consumer spending.
The latest inflation figures are set to be revealed this week, and will be calculated using the modified basket of goods. The CPI was 2.2% in January, with the RPI measuring 4.1%.
However, Fool.co.uk's latest inflation index reveals that our readers believe that the true rate of inflation is 8.1%, four times the Government's figure of 2.2%.
Of the people surveyed, the younger generation (18 - 25) were the group that felt the least impact of inflation, gauging their personal levels at 7.3% (although this is still far above the Government's estimate).
However, 42 - 49 year olds feel they are some of the worst affected, estimating their personal inflation at a mighty 8.8%.
This could be indicative of younger generations being more inclined towards spending their money on items such as DVD players and TVs, the cost of which has remained relatively low -- while their more mature counterparts feel the strain of the rising prices of consumer staples, such as wheat and eggs.
More: Why We Should Worry About Inflation