The basket of goods used for inflation – what’s in and what’s out?

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The inflation rate is measured by tracking the price change to hundreds of different goods and services. This so-called ‘basket of goods’ changes every year. What’s changed for 2019?

What is the basket of goods?

The basket of goods is designed to represent everything we spend money on, and how prices of items in this ‘basket’ change is reflected in the official measures of the rise in the cost of living.

In practice, it’s a sample of goods and services that are supposed to reflect our spending. There are around 700 different goods and services that go into this basket, and their prices are measured in high street shops and outlets at around 140 locations – as well as online retailers.

What goes into the basket changes every year.

What’s new in the basket of goods?

A number of goods make it into the basket – some for the first time this year and others are returning after an absence:

  • Popcorn: We’re buying more snacks, and the rise of popcorn brands means we’re eating more of it. Popcorn has already been measured as a cinema snack, but it’s been added as something we now eat at home.
  • Herbal and fruit teas: There was a time when herbal tea meant peppermint or chamomile, but these days there’s a huge range of flavours – and we’re buying more of them.
  • Baking and roasting tins: The ‘Great British Bake-Off’ effect has pushed baking and roasting tins into the basket of goods. I was surprised it had taken so long as the programmes have been very successful for some years!
  • Dinner plates: We’re buying more of our crockery piece by piece, so dinner plates are in but crockery sets are out of the basket.
  • Non-leather settee: I think most of us would call this a sofa(!), but either way, it’s replacing three-piece suites, which are going out
  • Washing liquid and gel: More of us are buying washing liquid and gel, so these make an appearance – and supermarkets are devoting more shelf space to them as well.
  • Smart speakers and portable speakers: Amazon Echo and Google Home speakers are in the basket, as are portable Bluetooth-connected speakers.
  • Dog treats: We’re spending more on dog treats than on dried dog food, so dog treats are in.
  • Electric toothbrushes: I’m surprised weren’t already being tracked!
  • Sugary and diet fizzy cola are being tracked separately. Previously the price of a can of ‘cola’ was tracked. However, since the government introduced a sugar tax, they want to track the price of both diet and regular drinks, to see if the sugar tax is working.

What’s out of the basket?

As well as the items I’ve already mentioned, here are some things that are disappearing:

  • Dried complete dog food: This is being dropped because we’re feeding less of this to our dogs.
  • Hi-fis are going out. These music centres were a fixture in many households from the 1970s, but these days we’re not buying them. More importantly, fewer shops sell them so it’s harder to track the price accurately
  • Washing powder: leaving the basket of goods.
  • Envelopes: Fewer of us are sending letters so we don’t need so many envelopes.

The basket of goods over the years

This basket of goods provides a fascinating insight into how our lives have changed.

  • 1940s: The basket contained a mangle. In case you’re too young to know what one is, it’s a pair of heavy metal rollers that squeezed water out of clothes you’d just washed by hand. These stayed in the basket of goods until the early 60s! The vacuum cleaner didn’t make it into the basket until 1947, and that was the year that corned beef also came into the basket of goods.
  • 1950s: The washing machine made it into the basket of goods in 1956.
  • 1960s: Fridges joined the basket in 1962.
  • 1970s: Smash instant mashed potato joined in the 1970s. You may remember that (annoying!) TV advert, which was obviously very effective.
  • 1980s: The duvet and muesli joined the basket in 1987 along with the cost of renting a video.
  • 1990s: CD players were included from 1997.
  • 2000s: the cost of chicken Mcnuggets was measured between 2007 and 2015, and sat nav systems were in the basket at the same time.

Photo by from Pexels

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Using a spending diary; how to spend less and save money

How to draw up a budget; getting to grips with budgeting

The gender pay gap – what is it and what’s changing?

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