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Inflation measure moves with modern technology

A range of modern-day consumer gadgets are being used to help monitor the rate of inflation in the UK.The Office for National Statistics' (ONS) 'basket' of goods now includes DVD recorders, satellite navigation systems (satnav) and digital radios (DAB).They are among 20 items included for the first time in the basket, which incorporates 120,000 prices of more than 650 goods and services to calculate inflation.Both consumer price index (CPI) and retail price index (RPI) inflation, the former of which is used to determine that Bank of England's inflation target, are based upon the ONS' basket."The contents of the basket are reviewed every year, and changes can be made for a number of reasons. Some items enter the basket because spending on them has reached a level that demands inclusion to ensure that the basket represents consumer spending. Some are included to make collection easier or to improve coverage of particular categories," the government agency said."Similarly, items are dropped for a variety of reasons. For example, diamond solitaire rings replace gemstone cluster rings for the simple, and unromantic, reason that it is easier to collect prices for them."A spokesperson for the ONS went on to elaborate that spending on satnav systems in Britain had reached a level that "demanded their inclusion"."DAB radios, sales of which have grown steadily in recent years, replace radio, CD, cassette players, on which expenditure has fallen," the representative went on to say."The growing popularity of flat-panel TVs is illustrated by the inclusion of a second, smaller type in the basket, replacing portable TVs, while old-style deeper widescreen TVs drop out."Digital cameras have been included in the basket since 2004. This year digital processing - now readily available at many shops and supermarkets - is included for the first time in place of mail order developing."

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