UK rejigs inflation basket

The Office for National Statistics, the government statistics bureau which calculates British inflation, said on Monday that it will also include MP4 players and Blu-ray discs, but rid the basket of wine boxes, MP3 players and rentals from DVD hire shops as part of its annual review.

The Office for National Statistics collects about 120,000 prices every month for a basket of about 650 goods and services.

Changes in the prices of the items are used to compile the two main measures of inflation: the Consumer Prices Index, which the Bank of England uses for its inflation target, and the Retail Prices Index, which is used to uprate pensions and benefits.

Many changes in the 2009 basket occur in the categories covering food and drink. Large free-range eggs replace large eggs, reflecting concerns over chicken's welfare after a television campaign by a British chef. Hot rotisserie chicken is included for the first time to represent a growing trend for hot takeaway food from supermarkets.

Large bottles of cider have also been removed from the basket to make space for smaller bottles.

Changes to the basket of goods and services this year will be reflected in the February 2009 price indices, published on 24 March.

Click here to read the Office for National Statistics' statement