Muffins and mp3 players to be included in inflation calculation

Muffins, mp3 players and fruit smoothies are to be included in the methodology for calculating future rates of inflation, the Office of National Statistics (ONS) has announced.

The ONS has included the goods in its annual update to its shopping basket – which contains 650 widespread goods and services – and acts as a way of gauging the Retail Prices Index (RPI) by reflecting public spending habits.

Speaking to the Times, Jeffrey Young, managing director of Allegra Strategies, the consultancy, said: “Innocent is now one of the top 100 food brands in the UK and it’s come from nowhere. It shows how popular smoothies have become.”

According to new figures from the Consumer Price Index (CPI) for the Office of National Statistics (ONS), utility tariffs increased by 0.7 per cent during last month.

This rise takes the annual rate to 2.5 per cent, more than the 2.2 per cent recorded in January and 0.5 per cent higher than the government’s two per cent target.

Tags: RPIX, allegra strategies, retail prices index, Retail Prices, cent target, National Statistics

Bank was split over rate rise

The recent freezing of interest rates caused a split within the Bank of England, with two Monetary Policy Committee (MPC) members voting in favour of a rise.

Minutes of the meeting in February have revealed that the vote was split 7-2 in favour of freezing rates but the divide means that the future for borrowers remains uncertain.

Those with a mortgage, credit card or loan could still see interest rates rise, with many people likely to suffer as a result if they do not have the financial clout to withstand another increase.

MPC members decided to wait and see what effect the previous three rate rises would have before moving ahead with another.

“It would take some time for the full effects of the past tightening to be seen. It was difficult to judge whether, and if so by how much, policy might need to be further tightened to keep inflation on track to meet the target,” the minutes read.

The previous rises came in quick succession, with rates jumping from 4.5 per cent in August to 5.25 per cent in January.

It appears that interest rates are likely to rise again in the coming months as the MPC attempts to bring down inflation which is currently running well above the government’s target of two per cent.

Tags: interest, target, interest rates, clout, succession, Consumer Price Index, RPIX