UK adds hand sanitiser and loungewear to inflation basket

Hand sanitiser, loungewear and home exercise kit have been added to the UK’s inflation basket and staff canteen sandwiches removed, in an update that reflects people’s changed habits during lockdown.

The Office for National Statistics measures inflation by tracking prices for a “virtual shopping basket” of hundreds of goods and services, designed to reflect consumers’ tastes and spending patterns, and weighted according to the relative importance of each item in a typical household’s spending.

Measuring inflation has been difficult over the past year because lockdowns have prevented people from spending on many of their usual activities, and store closures have made it hard for statisticians to collect a full range of prices for the items they track.

The 17 items added to the basket in the annual review include men’s loungewear, the uniform of homeworkers, along with hand weights and smartwatches used in home workouts. Hand sanitiser was now “a staple item”, the ONS said, and WiFi lightbulbs had been added because “spending more time within our own four walls has also encouraged us to invest in smart technologies”.

“The pandemic has impacted on our behaviour as consumers, and this has been reflected in the 2021 inflation basket of goods,” said Sam Beckett, ONS head of economic statistics.

The updated basket also reflects broader consumer trends: coffee sachets replace ground coffee, pure-fruit smoothies give way to the fruit and vegetable blends favoured by health-conscious consumers, and high-end vinyl flooring takes the place of more outmoded styles of carpet. 

Statisticians said the aim had been to include items that would remain popular when Covid-19 had passed: they had decided against including face masks in the basket, but added hybrid and electric cars in anticipation of the longer-term move to phase out sales of new petrol and diesel vehicles by 2030.

Most of the items removed from the basket — including canteen sandwiches — were done for technical reasons, the ONS said, and did not reflect any view on the future of office life.

There were no changes to the services included in the basket, which range from haircuts to airport parking fees, despite large parts of the service sector grinding to a halt over the past year.

However, the ONS has changed the weights it places on different items in the basket when calculating the headline rate, to reflect changes in spending patterns under lockdown conditions.

Over the past year, households have been spending a bigger share of their income on food, clothes and communication, for example — and significantly less on transport, culture and eating out.

In setting the weights for 2021, which would usually be based on 2019 spending patterns, the ONS used data from 2020 to make adjustments where there was a clear change between the two years.

Although spending patterns are bound to change again as the economy reopens, the ONS does not plan to review the weights again this year.