Smartphone and app prices to help calculate UK inflation rates

Smartphone and app prices to help calculate UK inflation rates

The UK’s Office of National Statistics (ONS) will soon start monitoring the prices of smartphones and smartphone apps sold via the Apple App Store, Android Market and other smartphone marketplaces, adding them to the basket of goods that judges the national rate of inflation.

The ONS updates its basket of goods annually, adding and replacing products and services that would consitute a representative sample of an average household purchases. These are used to calculate the monthly inflation rate which currently sits at 4%, double the rate that the Bank of England has targeted.

Smartphones and apps have replaced ringtones and wallpapers, which have dropped in popularity as the smartphone market boomed. The ONS has also added the cost of internet dating sites, to help better representing what UK consumers are spending their money on.

ONS statistician Phil Gooding said:

“Many of these new items show the way technology is changing our lives. Powerful smart phones and the applications that run on them have become essential for many when communicating or seeking information. Likewise, increasing numbers of people now seek a partner via internet dating sites.”

The BBC reports that the ONS collects about 180,000 separate price quotations of this basket of items in 150 areas of the UK. These are then used to calculate the Consumer Prices Index (CPI) and Retail Prices Index (RPI) measures of inflation.

Read next: Jet-setting just got more fabulous as Jetsetter partners with ASMALLWORLD