Basket of goods in 2015 to measure UK inflation
Inflation affects the value of the pound in your pocket and every year the Office for National Statistics (ONS) reviews its basket of goods and services which are used to measure the rate of inflation in the UK.
The list of goods and services are generally reviewed annually and items may be introduced or dropped in order to reflect changes in consumer spending habits based on the sort of things people buy due to changing tastes and advancements in technology.
Recently the ONS released details of goods to be used for 2015. Amongst new items included in 2015 are e-cigarettes, for which the numbers of users have tripled since 2010. Items falling out of the list are Sat Navs, which are no longer included mainly because many drivers now navigate using smart phones but also because some new cars now come with Sat Navs built in. (For a full list of items, please refer to the ONS website).
Just last week, UK inflation hit zero for the first time on record, with a period of deflation anticipated. Whilst this effectively boosts household income in real terms, deflation may stunt economic recovery as businesses and consumers delay spending in the hope prices continue to fall ….however we wait to see the reaction (if any) of the Bank of England on interest rates and also the effect (if any) from the outcome of the General Election.Talk to Barnes Roffe today