Changes to CPI & RPI shopping baskets
The Consumer Prices Index (CPI) and Retail Prices Index (RPI) can be viewed as the changing cost of a large 'shopping basket' containing the goods and services bought by a typical household in the course of a year.
Since it is impossible to price all of the products bought by every household, a specific selection of representative items are chosen which should give a reliable estimate of inflation for a broad range of similar goods and services.
The basket is reviewed every year. New items are added, and others removed, solely with the aim of producing reliable measures of inflation. The changes do not necessarily imply that these specific goods and services have grown or fallen significantly in popularity recently.
A range of additional goods and services will be included in the basket underpinning CPI and RPI from February 2005. Please see the related article in the right hand navigation.
Spending on services accounts for around half of consumers' expenditure. Many of the new additions to the basket this year are designed to improve coverage in this area, including private surgery and chiropractic medicine, home delivery and ATM charges, admissions to music concerts, and fees charged by solicitors and carpenters.
The review of the basket also identified specific markets where spending levels justify additional goods. Frozen chicken nuggets will be priced to represent convenience poultry products. Spending on leather furniture, champagne, gemstone jewellery and pets likewise will be explicitly represented from 2005.
Two high technology goods enter the basket this year, laptop computers and mobile phone handsets. Their inclusion has necessarily followed a period of ONS research to ensure that changes in prices of these fast-changing goods may be properly adjusted for ongoing changes in product quality.
The annual review considers not only the basket of representative items but also where those items are purchased. Internet purchases of DVDs, vending machine sales of cigarettes and popcorn bought in cinemas all enter the basket in 2005 to improve coverage of spending through these retail channels.