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Version 1 Version 2
UK inflation basket: ebooks in, champagne out UK inflation basket: ebooks in, champagne out
(about 13 hours later)
The world may not have heard of EL James and her Fifty Shades of Grey trilogy were it not for her first publishing the erotic thrillers as ebooks. Perhaps the government's statisticians were among her readers – they have decided to mark the growth in digital book sales by adding ebooks to the basket of goods that is used to calculate the annual inflation rate. In a sign of their growing acceptance, ebooks have been included by government statisticians in the basket of goods used to measure the cost of living.
The Office for National Statistics (ONS) said ebooks, read on devices such as Amazon's Kindle or the Kobo eReader, represent "a significant and growing market", noting huge recent increases in the number of people reading books digitally. Data from Nielsen and Kantar Worldpanel suggests that ebooks accounted for 13-14% of all book sales in the UK in 2012, in volume terms, and around 6-7% of all book sales in value terms. The annual changes to the inflation basket, which the Office for National Statistics uses to monitor the impact of rising prices, provides an official snapshot of the changing spending habits and lifestyles in Britain.
The new basket of goods will used for the next 12 months to calculate the cost of living but is also a barometer of what consumers are currently buying – and what they have shunned. As austerity bites, the ONS has thrown out champagne bought in pubs and bars but has introduced the young person's cocktail ingredient of choice – white rum, bought in supermarkets and off-licences and used to make mojitos, piña coladas, daiquiris and hurricanes.
As well as ebooks, consumers are currently spending their money on digital television recorder/receivers, including personal video recorders. They replace standard Freeview receiver boxes, indicating that consumers are increasingly switching to devices that allow them to pause, record and rewind live television. White rum was included to better "cover spirits that are drunk by younger people".
As well as consumer trends, the ONS basket of goods also tells us what consumers are eating and drinking. According to the ONS, hot chocolate, blueberries, continental sliced deli type meats and packaged vegetables for a stir-fry are selling like ... hot cakes. The new basket of 700 goods also reflects the nation's changing eating habits and leisure pursuits. Rising consumption of charcuterie justified its place in the basket, while other additions, including hot chocolate, blueberries and packaged vegetables for a stir-fry – have been made to increase the ONS's coverage of certain food areas rather than to reflect a sudden surge in sales.
Perhaps more worrying is a rise in sales of white rum, which the ONS said appeals to increasing numbers of younger people. But perhaps it's more a case of the government's austerity measures dictating what consumers can afford to drink – sales of champagne have been taken out of the basket as the amount of champagne consumed continues to fall. Round lettuces – more people prefer iceberg lettuce and pre-packed salads – are falling out of favour as an inflation yardstick while cold, filled rolls in pubs are replaced by hot and cold sandwiches as well as puddings in staff canteens.
On the DIY front, self-assembly kitchen wall units are being added to the basket to improve coverage of furniture, while basin taps are being removed. Packs of daily disposable contact lenses are also entering the basket, replacing a pair of soft contact lenses. The ONS said ebooks, read on devices such as Amazon's Kindle or the Kobo eReader, are "a significant and growing market", noting huge recent increases in the number of people reading digitally.
The first retail price index (RPI) was published in 1914 and was dominated by food and shelter. Today, the ONS attempts to measure the cost of living by noting the prices of 700 separate goods and services in 150 different areas of the UK, but one of the big changes in recent years has been the spread of digital technology, with tablet computers added in 2012. Data from Nielsen and Kantar Worldpanel suggests that ebooks accounted for 13%-14% of all book sales in the UK in 2012, in volume terms, and around 6%-7% of all book sales in value terms.
As well as ebooks, consumers are currently spending on other technology including digital television recorder/receivers, including personal video recorders. They replace standard Freeview receiver boxes, indicating that consumers are increasingly switching to devices that allow them to pause, record and rewind live television.
Children's electronic educational toys, such as Vtech's popular InnoTab 2 and Leapfrog's LeapPad 2 devices, are also included for the first time.
The statisticians take account of the growth in do-it-yourself around the home. Self-assembly kitchen wall units are being added to the basket to improve coverage of furniture, while basin taps are being removed. Eyewear – or lack of it – is also considered with packets of daily disposable contact lenses entering the basket, replacing soft contact lenses.
While the first inflation measure – the retail price index (RPI) – was published in 1914 and was dominated by food and shelter, the ONS also measures inflation through the consumer price index (CPI), which does not include housing costs.
The CPI is the measure that the Bank of England is required to track. It was pegged at 2.7% for the fourth successive month in January.
The ONS said that it would be introducing a new index – the CPIH – which will be a measure of consumer price inflation that includes an element of owner-occupiers' housing costs.
From 19 March there will also be yet another measure of inflation published – the RPIJ, which is more aligned with the way inflation is calculated internationally.
The basket of goods used to measure CPI has changed significantly over the years. In 2001 DVDs were added for the first time, while in 2004 digital cameras and online music sales were added to the basket. In 2007 in-car satnav systems, mobile application and other downloads, recordable DVDs, small flat-panel TVs, digital radios, and digital processing all took their place on the statistician's spreadsheets.
Some people may feel a twinge of sadness at some of the items that went the other way – VHS video players, MiniDisc players, local newspapers, nests of tables, bread bins, and jigsaw puzzles have all been removed from the basket in recent years.
There is some good news for traditionalists this year, however. Charcoal barbecues are back in, replacing gas BBQs after sales of the latter plummeted between March and August last year.
What's new in the basketWhat's new in the basket
• ebooks• ebooks
• Digital TV recorders• Digital TV recorders
• Electric educational toy• Electric educational toy
• White rum• White rum
• Hot chocolate• Hot chocolate
• Blueberries• Blueberries
• Charcuterie• Charcuterie
• Spreadable butter• Spreadable butter
• Block butter• Block butter
• Packaged vegetables for a stir-fry• Packaged vegetables for a stir-fry
• Self-assembly kitchen wall units• Self-assembly kitchen wall units
• Daily disposable contact lenses• Daily disposable contact lenses
• Pub roll/sandwich, hot or cold• Pub roll/sandwich, hot or cold
• Non-disposable charcoal BBQ• Non-disposable charcoal BBQ
What's outWhat's out
• Standard Freeview receiver boxes• Standard Freeview receiver boxes
• Round lettuces• Round lettuces
• Champagne• Champagne
• Imported butter• Imported butter
• Home-produced butter• Home-produced butter
• Basin taps• Basin taps
• Soft contact lenses• Soft contact lenses
• Gas service charges• Gas service charges
• Staff restaurant desserts/puddings• Staff restaurant desserts/puddings
• Pub cold-filled roll/sandwich• Pub cold-filled roll/sandwich
• Gas BBQ• Gas BBQ
• Computer game with accessory• Computer game with accessory