A new inflation basket for 2016 has been announced by the Office for National Statistics (ONS). The inflation basket takes a broad spectrum of common items in our shopping baskets and charts them to see what’s more expensive, or not, and what that means for everyday living. It is a good way to get a simple understanding of inflation and the affect it has on your spending.
This year the basket has been updated to allow for changes in our shopping habits. Coffee pods and microwave rice pouches are in, nightclub entry fees and rewritable DVDs are out.
Here’s a video explaining inflation in more detail:
The Consumer Prices Index (CPI) rose by 0.3% in the year to January 2016, compared with a 0.2% rise in the year to December 2015. This is the third consecutive month of small increases, with the rate in January 2016 being the same as it was in January 2015.
The main contributors to the rise in the rate were motor fuels, and to a lesser extent food, alcoholic beverages and clothing. Air fare prices partially offset the rise in the rate, falling by more than they did a year ago. This followed a large increase in prices in December 2015.