Lockdown Lifts Weights and Loungewear Into U.K. Inflation Basket
(Bloomberg) -- The coronavirus pandemic has reshaped the way people live, and that’s changing how the U.K. measures inflation.
Loungewear, hand weights and sanitizer fluid have all been added to the list used to gauge living costs, the Office for National Statistics said on Monday. It’s part of an annual review of the basket of goods tracking consumer prices and gives an insight into the country’s changing lifestyles.
White chocolate bars and ground coffee were removed from the index, which is tracked by the government and Bank of England for signs of price pressures in the economy. While those items were judged less representative of what consumers buy, the added items reflect new technology and habits.
Smartwatches were also brought into the index along with weights after lockdowns prompted more people to workout at home. So were light bulbs that link to wifi as people sought to improve their living spaces. Hybrid and electric vehicles also made it into the basket after the U.K. mandated that 2030 will mark the end of sales of new gasoline and diesel cars.
Axminster and Wilton carpets dropped out of the basket. The heritage Axminster brand, whose woven floor coverings are found in Buckingham Palace, collapsed into administration early last year before being bought by a competitor.
The ONS re-calibrates its inflation basket each year in order to more accurately reflect the cost of living faced by households. Ten items were taken off the list, which comprises over 700 goods and services, while 17 were added.
Inflation is coming under closer scrutiny amid speculation that prices are starting to pick up. The Consumer Prices Index has been below the Bank of England’s 2% target for 18 months. Economists expect it to accelerate to just below that goal this year, raising the possibility that central bank officials could opt to tighten their ultra-loose monetary policy.
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