In the UK: Netflix and Flavoured Milk Added to Basket Used to Measure Inflation

From The Guardian, March 13

Netflix and flavoured milk have been added to the basket of goods used to measure inflation, while DVD recorders and hardwood flooring have been dropped in a sign of changing consumer habits.

Video streaming services, including Netflix and Amazon Instant Video, were added “to capture the growing video on demand market” according to the Office for National Statistics (ONS). Flavoured milk was added as consumers increasingly favour the “grab and go sector of the milk market”, while DVD recorders were dropped as consumers turned to alternatives. Austerity and recession took its toll on hardwood flooring, which was removed from the list as cost-conscious Britons turned their back on one of the more expensive ways of upgrading a home.

The annual reshuffle of the “shopping basket” – which offers a snapshot of changing spending habits and lifestyles – also saw fruit snack pots, men’s clothing hire, and canvas shoes added to the 2014 list.

Wallpaper paste and gardeners’ fees were among the items ejected from the new basket of 699 items.

As well as updating the contents of the basket, the ONS also reviewed the weighting attached to each item that makes up the Consumer Prices Index, to better reflect the changing nature of the cost of living.

“For example, household fuels now account for a much larger proportion of people’s living costs than a decade ago,” it said.

UK inflation has been falling in recent months, and fell to below the Bank of England’s 2% target for the first time in more than four years in January, brightening the outlook for squeezed consumers and boosting hopes that wage growth will start to outpace price rises by the end of 2014.