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Tracking inflation by the mega-pixel

Digital cameras gain mainstream status

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Digital cameras have officially arrived. They have been added to the Consumer Price Index shopping basket - the selection of consumer goods used to track inflation in the UK. Mini-disc players, however, have been dropped from the basket, a sign of fading popularity.

The CPI shopping basket is tracked month by month by the Office for National Statistics (ONS). It is a selection of around 650 products, updated annually, that are chosen to represent a 'typical' household's buying habits.

The tech sector has posed a bit of a challenge for the ONS because quality and pricing changes so quickly that it is hard to compare like-for-like products on an annual basis. Technological advances have a huge impact on the price of the goods, and this change in quality must also be factored in.

Printers have been dropped from this year's basket, for example, so that the ONS can investigate how to adjust prices to reflect changes in product quality. ®

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