Monday, March 21, 2011

UK - Inflation calculations now include the cost of smartphones in the basket of prices

[bloomberg] The price of smartphones and dating-agency fees will help determine Britain’s inflation rate after the Office for National Statistics added them to the list of goods and services it monitors to gauge living costs.

They will be included for the first time in the basket of about 650 goods and services that make up the consumer prices index and the retail prices index, the agency said in an e-mailed statement released in London today. The revised basket will be incorporated into February’s inflation data, due to be released on March 22.

The list is reviewed annually to ensure it represents consumer spending, with changes made for reasons ranging from improved technology to popularity. The changes announced today reflect “new trends” in spending habits, the ONS said. As well as smartphones, the software applications that run on them will replace mobile-phone downloads such as ringtones and wallpaper images, it said.

“Many of these new items show the way technology is changing our lives,” ONS statistician Phil Gooding said in the statement. “Powerful smartphones and the applications that run on them have become essential for many when communicating or seeking information. Likewise, increasing numbers of people now seek a partner via internet dating sites.”

The ONS will also add sparkling wines and remove vending- machine cigarettes and replace pork-shoulder joints with oven- ready joints. Television prices will now be collected differently, with the price of televisions bigger than 32 inches (81 centimeters) being measured separately to reflect the trend of households now setting up “home-cinema” systems, it said.

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